Hersha Hospitality prices public offering of 24M shares, expects to use proceeds to cut debt

Hersha Hospitality prices public offering of stock

PHILADELPHIA — Hotel owner Hersha Hospitality Trust said Friday it has increased its offering of new shares to 24 million common shares and will sell them at $4.25 a share.

The real estate investment trust said it plans to use the proceeds to pay off debt under its revolving line of credit and for general corporate purposes.

Hersha owns interests in 76 hotels, primarily from Boston to Washington, D.C.

The price set for the issue is about 6 percent lower than its closing price of $4.52 on Thursday. Its shares slipped a penny to $4.51 in midday trading Friday.

The investment trust company had announced Thursday that it would sell 19 million shares, but said Friday the amount was increased due to demand.

The offering’s underwriters will have an option to buy another 3.6 million shares to cover over-allotments, Hersha said.

Hersha estimates gross proceeds will be about $102 million, or $117.3 million if the overallotment options are recognized in full.

BofA Merrill Lynch, Raymond James and UBS Investment Bank are joint book-running managers for the offering.