ATLANTA (AP) — Hotel operator Lodgian Inc. said Friday private equity firm Lone Star Funds will acquire the company for about $54.2 million in cash.
The price tag is about $270 million including debt. Lone star will pay $2.50 per share for the company, a 40 percent premium to Lodgian’s closing price of $1.78 on Thursday.
Lodgian, which is based in Atlanta and operates 34 hotels, has long been struggling with debt. Last year Lodgian’s auditors questioned whether the company could continue to operate without going out of business. And Lodgian began selling off hotels and put itself up on for sale unsuccessfully in 2007.
Lodgian’s board and some shareholders that hold 26.8 percent of outstanding shares have agreed to vote for the acquisition, which is expected to close during the second quarter if approved.
Shares rose 67 cents, or 38 percent, to $2.45 during midday trading.