DALLAS—Ashford Hospitality Trust, Inc.’s Board of Directors has unanimously approved a plan to spin off its asset management business into a separate, publicly traded company in the form of a taxable distribution.
The distribution is expected to be completed in the third quarter of 2014 and will be comprised of common stock in Ashford, Inc., a newly formed or successor company of the company’s existing advisor subsidiary, Ashford Hospitality Advisors LLC, which currently advises Ashford Hospitality Prime, Inc. The company plans to file a listing application for Ashford Inc. with the NYSE or NYSE MKT Exchanges. In connection with the spinoff, it is anticipated that Ashford Inc. will enter into a 20-year advisory agreement to externally advise the company. In addition, Ashford Inc. will continue to externally advise Ashford Prime.
The company’s investment securities subsidiary is raising capital and it is expected that Ashford Inc. will advise this platform. In addition, other business opportunities for Ashford Inc. include future external advisory services to other platforms, such as a select-service hotel platform and a hotel debt platform, both of which are opportunities being explored by the company. According to the company, it is anticipated that Ashford Inc. will pursue other business acquisitions, which may include hotel management, project and construction management and other hospitality related services.
This distribution is anticipated to be declared during the third quarter of 2014; however, it remains subject to the filing of the required registration statement with the Securities and Exchange Commission (SEC), the review of the registration statement by the SEC, the approval of the listing of shares by the applicable exchange and other legal requirements. The company expects to file the required registration statement next month. According to the company, it cannot be certain this distribution will proceed or proceed in the manner as currently anticipated.