Carey Watermark Investors 1 and 2 Stockholders Approve Merger
April 13, 2020
Carey Watermark Investors 1 Incorporated (CWI® 1) and Carey Watermark Investors 2 Incorporated (CWI® 2) announced on April 9 that the stockholders of each company approved the proposed merger of the two companies to create Watermark Lodging Trust (WLT), a self-managed non-traded REIT with increased scale and operating efficiencies.
The companies filed articles of merger with the Maryland State Department of Assessments and Taxation and the transaction is expected to close as soon as practicable, subject to various closing conditions.
In connection with the merger, CWI 1 stockholders will receive a fixed exchange ratio of 0.9106 shares of CWI 2 Class A common stock for each share of CWI 1 common stock. CWI 2 will be the surviving entity in the merger and will be renamed Watermark Lodging Trust.
CWI 1 and CWI 2 are non-traded REITs managed by affiliates of W. P. Carey Inc. and Watermark Capital Partners, LLC. Following the close of the merger, the combined company will complete an internalization transaction with W. P. Carey Inc. and Watermark Capital Partners, as a result of which the combined company will become self-managed.
“We believe the strategic combination of CWI 1 and CWI 2 creates meaningful benefits for all shareholders and is even more compelling amid today’s economic backdrop,” said Michael Medzigian, CEO of CWI 1 and CWI 2. “As a combined company with a more simplified structure, we will have a larger balance sheet with greater financial flexibility and are better positioned to improve value as we work through this challenging period in the lodging industry. We will continue to work on behalf of our shareholders to execute on our strategy and create long-term growth.”
Advisors
Barclays acted as financial advisor to a special committee of CWI 1’s independent directors with regard to the transaction. Hogan Lovells is acting as legal advisor to the CWI 1 special committee. Morgan Stanley & Co. LLC acted as financial advisor to a special committee of CWI 2’s independent directors with regard to the transaction. Clifford Chance US LLP is acting as legal advisor to CWI 2 and Pepper Hamilton LLP is acting as legal advisor to the CWI 2 special committee. Duff and Phelps has rendered a fairness opinion to the CWI 2 special committee as to the internalization.
Carey Watermark Investors 1 Inc. and Carey Watermark Investors 2 Inc.
Carey Watermark Investors 1 Incorporated (CWI 1) and Carey Watermark Investors 2 Incorporated (CWI 2) are publicly registered real estate investment trusts (REITs) that were formed to make investments primarily in the lodging and lodging-related sectors and in recent years have been one of the largest and most active investors in the lodging industry. Affiliates of W. P. Carey Inc. and Watermark Capital Partners advise CWI 1 and CWI 2 and manage their overall portfolios.
Source: SEC
