(Reuters) - Private equity firm Blackstone Group LP (N:BX) said on Monday it would buy U.S. hotel owner LaSalle Hotel Properties (N:LHO) for $3.7 billion (2.8 billion pounds), topping a rival bid from Pebblebrook Hotel Trust (N:PEB) in April for $3.5 billion.
The deal values LaSalle at $33.50 per share compared with Pebblebrook's offer of $31.75 per share and represents a premium of 5 percent to LaSalle's closing price on Friday.
Pebblebrook raised its offer in April after LaSalle rejected it a previous bid, saying it undervalued the owner of high-end locations including 'W' Los Angeles.
LaSalle Chairman Stuart Scott said it was in touch with 20 potential buyers and signed confidentiality agreements with 10 of them before deciding on Blackstone's offer.
Blackstone usually buys hotels and other real estate holdings at a discount, restructures them and sells for a profit.
The private equity firm exited Hilton Worldwide Holdings Inc (N:HLT) on Friday after nearly 11 years by selling about 5.8 percent stake or 15.8 million shares in the hotel chain operator for about $1.32 billion.
Shares of LaSalle rose 5.2 percent at $33.55 in premarket trading, while shares of Blackstone were marginally up.
Citigroup (NYSE:C) Global Markets Inc and Goldman Sachs & Co (NYSE:GS) LLC were the financial advisers, while Goodwin Procter LLP and DLA Piper LLP (US) were the legal advisers to LaSalle.
Morgan Stanley & Co (NYSE:MS). LLC and J.P. Morgan were the financial advisers to Blackstone. Simpson Thacher & Bartlett LLP was acting as legal adviser to Blackstone.
