Market Overview

Pebblebrook Hotel Trust Comments on the ISS and Glass Lewis Recommendations for the Proposed Acquisition of LaSalle Hotel Properties


Pebblebrook Hotel Trust (NYSE:PEB) ("Pebblebrook") today commented on
the recommendations from proxy advisory firms Institutional Shareholder
Services ("ISS") and Glass Lewis & Co. ("Glass Lewis") in support of
Pebblebrook's proposed acquisition of LaSalle Hotel Properties (NYSE: LHO) ("LaSalle").

"We are pleased that both ISS and Glass Lewis have recommended that
shareholders vote for our proposed acquisition of LaSalle," said Jon E.
Bortz, Chairman, President and Chief Executive Officer of Pebblebrook
Hotel Trust. "Both reports clearly recognize the attractive strategic
and financial rationale for the transaction, which serves the interests
of shareholders of both companies. Together, Pebblebrook and LaSalle
will form an industry leader with the premier portfolio of high-quality
independent lifestyle hotels, the ability to generate strong cash flow
and a flexible balance sheet. We continue to make progress towards the
expected completion of this merger in the fourth quarter of 2018, and we
encourage Pebblebrook and LaSalle shareholders to vote in favor of this
value-creating transaction at their respective Special Meetings on
November 27, 2018."

In making its recommendations, ISS stated:

  • "A vote FOR this [LaSalle] proposal is warranted given the compelling
    rationale, the premium to the unaffected share price and to that of
    the previous Blackstone offer, expected financial benefits to the
    combined entity, and the downside risk of non-approval."
  • "The Transaction will result in a combined entity with a stronger
    financial condition, increased financial flexibility, superior
    pro-forma capital levels, better access to capital, greater ability to
    spread business strategy execution risks across a larger enterprise
    and additional options for future potential strategic alternatives
    than either party would have on a standalone basis."
  • "Support for the [Pebblebrook] share issuance is warranted given the
    compelling rationale and that the merger with LHO is expected to
    provide financial benefits, including cost synergies and accretion to
    adjusted FFO per share. "

In making its recommendations, Glass Lewis stated:

  • "The acquired properties appear entirely consistent with
    [Pebblebrook's] existing operational scope and risk profile, and
    management clearly expects to drive greater value from LaSalle's
    portfolio than is currently recognized by the market. We expect this
    effort to be supported by reasonable synergies, including the
    elimination of duplicative administrative and listing expenses and the
    unification of two presently separate operating platforms."
  • "…in offering a transaction multiple consistent with other industry
    buy-outs, Pebblebrook's final bid necessarily implies a rather
    material premium to LaSalle's true unaffected price."

As previously announced on September 6, 2018, Pebblebrook and LaSalle
entered into a definitive merger agreement pursuant to which Pebblebrook
will acquire 100% of LaSalle's outstanding common shares. Under the
terms of the merger agreement, for each LaSalle common share owned, each
LaSalle shareholder may elect to receive either a fixed amount of $37.80
in cash or a fixed exchange ratio of 0.92 Pebblebrook common share. A
maximum of 30% of the outstanding LaSalle common shares may elect to
receive cash (and elections of cash will be subject to pro rata cutbacks
if holders of more than 30% of the outstanding LaSalle common shares
elect to receive cash).

The transaction is expected to close on November 30, 2018, subject to
customary closing conditions, including approval by LaSalle and
Pebblebrook shareholders. Pebblebrook's and LaSalle's Special Meetings
of shareholders are scheduled to take place on Tuesday, November 27,
2018, at 9:00 a.m. and 10:00 a.m. Eastern Time, respectively.
Pebblebrook and LaSalle shareholders of record at the close of business
on October 23, 2018, will be entitled to vote at the Special Meetings.

Raymond James and BofA Merrill Lynch are acting as financial advisors,
Hunton Andrews Kurth LLP is acting as legal counsel and Okapi Partners
LLC is serving as information agent to Pebblebrook in connection with
the proposed transaction.

For more information, please visit

About Pebblebrook Hotel Trust

Pebblebrook Hotel Trust is a publicly traded real estate investment
trust ("REIT") organized to opportunistically acquire and invest
primarily in upper upscale, full-service hotels located in urban markets
in major gateway cities. The Company owns 28 hotels, with a total of
6,973 guest rooms. The Company owns hotels located in 9 states and the
District of Columbia, including: Los Angeles, California (Beverly Hills,
Santa Monica and West Hollywood); San Diego, California; San Francisco,
California; Washington, DC; Coral Gables, Florida; Naples, Florida;
Buckhead, Georgia; Boston, Massachusetts; Minneapolis, Minnesota;
Portland, Oregon; Philadelphia, Pennsylvania; Nashville, Tennessee;
Columbia River Gorge, Washington; and Seattle, Washington. For more
information, please visit us at
and follow us on Twitter at @PebblebrookPEB.

Additional Information about the Proposed
Merger Transaction and Where to Find It

This communication relates to the proposed merger transaction pursuant
to the terms of the Agreement and Plan of Merger, dated as of September
6, 2018, as amended on September 18, 2018, by and among Pebblebrook
Hotel Trust, Pebblebrook Hotel, L.P., Ping Merger Sub, LLC, Ping Merger
OP, LP, LaSalle Hotel Properties and LaSalle Hotel Operating
Partnership, L.P. In connection with the proposed merger transaction, on
September 18, 2018, Pebblebrook filed with the United States Securities
and Exchange Commission ("SEC") a registration statement on Form S-4
(which was declared effective on October 26, 2018) and a definitive
joint proxy statement/prospectus dated October 29, 2018 of Pebblebrook
and LaSalle that also constitutes a prospectus of Pebblebrook.
Pebblebrook and LaSalle also plan to file other relevant documents with
the SEC regarding the proposed merger transaction. INVESTORS ARE URGED
PROPOSED MERGER TRANSACTION. You may obtain a free copy of the
definitive joint proxy statement/prospectus and other relevant documents
(if and when they become available) filed by Pebblebrook or LaSalle with
the SEC at the SEC's website at
Copies of the documents filed by Pebblebrook with the SEC will be
available free of charge on Pebblebrook's website at
or by contacting Pebblebrook's Investor Relations at (240) 507-1330.
Copies of the documents filed by LaSalle with the SEC will be available
free of charge on LaSalle's website at
or by contacting LaSalle's Investor Relations at (301) 941-1500.

Certain Information Regarding Participants

Pebblebrook and LaSalle and their respective trustees, executive
officers and other members of management and employees may be deemed to
be participants in the solicitation of proxies in respect of the
proposed merger transaction. You can find information about
Pebblebrook's executive officers and trustees in Pebblebrook's
definitive proxy statement filed with the SEC on April 27, 2018 in
connection with Pebblebrook's 2018 annual meeting of shareholders. You
can find information about LaSalle's executive officers and directors in
LaSalle's definitive proxy statement filed with the SEC on October 29,
2018 in connection with the special meeting of shareholders. Additional
information regarding the interests of such potential participants is
included in the definitive joint proxy statement/prospectus and may be
included in other relevant documents filed with the SEC if and when they
become available. You may obtain free copies of these documents from
Pebblebrook or LaSalle using the sources indicated above.

No Offer or Solicitation

This communication shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be any
sale of securities in any jurisdiction in which such offer, solicitation
or sale would be unlawful prior to registration or qualification under
the securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the requirements
of Section 10 of the Securities Act of 1933, as amended (the "Securities

Cautionary Statement Regarding Forward Looking

Certain statements in this communication that are not in the present or
past tense or that discuss the expectations of Pebblebrook and/or
LaSalle are forward-looking statements within the meaning of Section 27A
of the Securities Act and Section 21E of the Securities Exchange Act of
1934, as amended. These forward looking statements, which are based on
current expectations, estimates and projections about the industry and
markets in which Pebblebrook and LaSalle operate and beliefs of and
assumptions made by Pebblebrook management and LaSalle management,
involve uncertainties that could significantly affect the financial
results of Pebblebrook or LaSalle or the combined company. Pebblebrook
and LaSalle intend such forward-looking statements to be covered by the
safe harbor provisions for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995 and include this
statement for purposes of complying with these safe harbor provisions.
Words such as "believe," "expect," "intend," "anticipate," "estimate,"
"project" and variations of such words and similar expressions are
intended to identify such forward looking statements, which generally
are not historical in nature. Such forward-looking statements may
include, but are not limited to, statements about the anticipated
benefits of the proposed merger transaction, including future financial
and operating results, the attractiveness of the value to be received by
LaSalle shareholders, the attractiveness of the value to be received by
Pebblebrook and the combined company's plans, objectives, expectations
and intentions and descriptions relating to these expectations.

All statements that address operating performance, events or
developments that Pebblebrook and LaSalle expect or anticipate will
occur in the future —including statements relating to expected
synergies, improved liquidity and balance sheet strength —are forward
looking statements. These statements are not guarantees of future
performance and involve certain risks, uncertainties and assumptions
that are difficult to predict. Although Pebblebrook and LaSalle believe
the expectations reflected in any forward-looking statements are based
on reasonable assumptions, Pebblebrook and LaSalle can give no assurance
that their expectations will be attained and therefore, actual outcomes
and results may differ materially from what is expressed or forecasted
in such forward looking statements. Some of the factors that may affect
outcomes and results include, but are not limited to: (i) the outcome of
any legal proceedings that may be instituted against the companies and
others related to the proposed merger transaction, (ii) unanticipated
difficulties or expenditures relating to the proposed merger
transaction, the response of business partners and competitors to the
announcement of the proposed merger transaction, and/or potential
difficulties in employee retention as a result of the announcement and
pendency of the proposed merger transaction, (iii) changes affecting the
real estate industry and changes in financial markets, interest rates
and foreign currency exchange rates, (iv) increased or unanticipated
competition for the companies' properties, (v) risks associated with the
hotel industry, including competition for guests and meetings from other
hotels and alternative lodging companies, increases in wages, energy
costs and other operating costs, potential unionization or union
disruption, actual or threatened terrorist attacks, any type of flu or
disease-related pandemic and downturns in general and local economic
conditions, (vi) the availability and terms of financing and capital and
the general volatility of securities markets, (vii) the companies'
respective dependence on third-party managers of their respective
hotels, including their inability to implement strategic business
decisions directly, (viii) risks associated with the real estate
industry, including environmental contamination and costs of complying
with the Americans with Disabilities Act of 1990, as amended, and
similar laws, (ix) the possible failure of the companies to maintain
their respective qualifications as a REIT and the risk of changes in
laws affecting REITs, (x) the possibility of uninsured losses, (xi)
risks associated with redevelopment and repositioning projects,
including delays and cost overruns, (xii) the risk of a material
failure, inadequacy, interruption or security failure of the companies'
or their respective hotel managers' information technology networks and
systems, (xiii) risks associated with achieving expected revenue
synergies or cost savings, (xiv) risks associated with the companies'
ability to consummate the proposed merger transaction and the timing of
the closing of the proposed merger transaction, and (xv) those
additional risks and factors discussed in reports filed with the SEC by
Pebblebrook and LaSalle from time to time, including those discussed
under the heading "Risk Factors" in their respective most recently filed
reports on Forms 10-K and 10-Q. Neither Pebblebrook nor LaSalle
undertakes any duty to update any forward-looking statements appearing
in this document.

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