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Cascade Investment Piles Up More Shares Of Strategic Hotels & Resorts Inc. (BEE); Expresses Interest in Buying the REIT

There have been rumors circulating that Strategic Hotels & Resorts is exploring a sale and actually hired a bank to assist the company in finding a potential buyer. On the back of the news, Cascade announced that it might be interested in participating as a buyer in a potential transaction. However, the officials at Strategic didn’t announce or comment a potential buyout, claiming that the company doesn’t comment on market rumors. Last year, the investor bought Four Seasons Punta Mita from the company for $200 million.

Reportedly, the company might serve as an attractive acquisition at the moment as the demand for upscale accommodation increases amid corporate travel rebound. Specifically, Hendersonville, a Tennessee-based research firm, has recently estimated that the occupancy rate at luxury properties reached 70.9% in the first six months. Ian Weissman, an analyst at Credit Suisse, placed a $16.50 per share price tag for the company under a takeout scenario.

Leaving the rumors aside, Strategic Hotels & Resorts has recently announced the acquisition of the remaining 49% ownership interest in the New York-located JW Marriott Essex House hotel, which is anticipated to generate an incremental $5.5 million of EBITDA over the remaining five-month period of the current year.

Just a few days ago, Strategic Hotels & Resorts disclosed its financial results for the second quarter of this year, which included revenue of $356.9 million, up by 29.2% year-over-year. Meanwhile, its net income declined to $6.7 million or $0.02 per diluted share, compared to $80.8 million or $0.35 per share reported for the same quarter a year ago, which included a one-time gain from the acquisition of Hotel del Coronado.

Disclosure: None

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