The lodging real estate investment trust (REIT),
Chatham Lodging Trust
), declared a public offering of 4.5 million common shares of
beneficial interest, with a par value of one cent per share.
Further, to cover any over-allotments, the company provided a
30-day option to underwriters to buy up to an additional 675,000
) and UBS Investment Bank of
) supported Chatham as the joint book-running managers of the
offering. Chatham expects to use the net proceeds in its
operating partnership, in exchange for common units of limited
partnership interest that it has at present.
Notably, Chatham's operating partnership intends to utilize
the obtained amount to finance Chatham's recent hotel acquisition
- Hyatt Place Pittsburgh/North Shore. Earlier this week, the
company inked a deal to acquire the particular hotel for $40
million (including customary pro-rated amounts and closing
In addition, the rest of the offering amount is expected to be
used to pay off the debt under the company's senior secured
revolving credit facility and spend for proposed investments as
well as for other corporate purposes.
We believe that this public offering will provide the company
financial flexibility and position it favorably to pursue
investment opportunities and acquisitions, which will go a long
way in boosting its top-line growth. However, the effect of share
dilutions cannot be ignored.
Chatham mainly invests in premium-branded extended-stay and
select-service hotels. Currently, the company owns 20 hotels,
with an aggregate of 2,733 rooms, across 11 states and the
District of Columbia.
Chatham currently carries a Zacks Rank #3 (Hold). Better
performing lodging REITs include
Host Hotels & Resorts, Inc.
) carrying a Zacks Rank #2 (Buy).
BARCLAY PLC-ADR (BCS): Free Stock Analysis
CHATHAM LODGING (CLDT): Free Stock Analysis
HOST HOTEL&RSRT (HST): Free Stock Analysis
UBS AG (UBS): Free Stock Analysis Report
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