Red Lion Hotels Corporation has received an unsolicited takeover offer valued around $173 million, the Spokane-based hospitality chain announced...
Red Lion Hotels Corporation has received an unsolicited takeover offer valued around $173 million, the Spokane-based hospitality chain announced today, sending its shares up 23 percent .
Columbia Pacific Opportunity Fund, a Seattle-based investment group with a 12.7 percent stake in Red Lion, is offering $9.50 in cash for the rest of Red Lion’s 18.2 million shares, a 35 premium over Friday’s closing price of $7.05. On news of the offer, which was made in a June 27 letter to the company , Red Lion’s stock price rose 92 cents, or 13 percent, to close Monday at 7.97.. The trading volume topped 323,000, blasting past the average of about 11,000.
The bid follows a round of buyout talks, initiated by Columbia in April, that Red Lion had turned down.
Red Lion, which owns and operates 53 hotels located in nine states and one Canadian province, said its board of directors would evaluate the proposed deal. Columbia Pacific said it expected a decision within 60 days.
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One of the principals for Columbia Pacific, Daniel Baty, is the founder, chairman and co-CEO of Emeritus Corporation, a Seattle-based operator of assisted-living communities. His family also owns several wine brands through Corus Estates & Vineyards.