Untitled document
Ashford Executives buy company assets on eve of
proposed spin-off
UNITE HERE raises questions about timing, impact on
shareholder value:
"This is why we need to a Special Meeting to restore
shareholder rights at Ashford Trust."
New York, September 15. On September 10, Ashford
Hospitality Trust (NYSE:AHT) reported that it had sold 40% of
Ashford Investment Management (AIM) to two insiders, including
AHT's chairman and CEO, in an off-market transaction for $1.1
million, according to UNITE HERE.
The insider sale comes just weeks before the public
markets will value AIM as an asset of Ashford Inc., which is
being spun off of AHT, one of the largest hotel REITs.
UNITE HERE is soliciting support for a special meeting of
AHT shareholders to vote on improving the terms of the spin-off
and to restore shareholder rights that were stripped by AHT last
Spring.
The sale and its timing raise a number of questions for
AHT investors:
*If insiders wished to increase their equity in
AIM, why didn't they wait for the imminent spinoff of Ashford
Inc. to buy shares on the public market?
*How will AHT's reduced equity stake in AIM affect
the share price of post-spinoff Ashford Inc.?
*How did the parties come up with this price which
suggests the valuation for AIM is $3 million?
UNITE HERE calls on Ashford to release details of its
valuation, and to explain the rationale for executing this
self-dealing sale ahead of the spin-off of AIM's parent company,
Ashford Inc.
In February 2014, AHT stripped key shareholder rights two
days before announcing its plans to spin off Ashford Inc.
Subsequently it announced plans to restrict shareholder rights
at the spun-off entity, including removing the rights of
shareholders to call special meetings and elect directors
annually. Immediately after the annual meeting of AHT - where
the lead independent director received the support of only 41%
of outstanding shares - the company extended the term of its
external advisory agreement from five to twenty years.
"The inside sale of AIM is exactly why AHT shareholders
should support a special meeting to restore shareholder rights
and improve the terms of the spin-off of Ashford Inc. AHT should
suspend these insider transactions until shareholders have had
an opportunity to vote on the transactions," said JJ Fueser,
UNITE HERE's research coordinator.
Funds managed by AIM affiliates include AIM Real Estate
Hedged Equity (U.S.) Fund, LP, a Delaware limited partnership,
and AIM Real Estate Hedged Equity Master Fund, L.P., a Cayman
Islands exempted limited partnership, according to company
filings.
UNITE HERE is soliciting support for a special meeting of
shareholders to restore shareholder rights and preserve
strategic alternatives at AHT. Visit
http://www.unlock-ashford.org and follow @HotelCorpGov.
UNITE HERE is a member of the Council of Institutional
Investors, and its members are beneficiaries of pension funds
with over $60 billion in assets. UNITE HERE Local 878 represents
workers at Ashford's Sheraton Anchorage, which is subject to a
longstanding labor dispute.
Contact: JJ Fueser (416) 893-8570, Elliott
Mallen (312) 656-5807