Ashford Hospitality's CEO Responds To Lawsuit, Notes It's 'Another Distracting Tactic By One Shareholder'
Shares of Ashford Hospitality Prime Inc (NYSE: AHP) were trading higher by more than 2 percent on Thursday despite the company being on the receiving end of a lawsuit.
Sessa Capital, an activist investor and 8.2 percent owner of Ashford Hospitality released an open letter on Tuesday. The fund's managers noted they are "deeply troubled" by the company's recent announcement that it has amended its operating partnership agreement to enable holders of its Operating Partnership units to acquire voting shares of the company for $0.01 per share.
Asfhord Hospitality has been evaluating strategic alternatives, including a potential sale of itself, since August 2015.
"The timing of this action makes it apparent the action was designed to help the incumbent directors hold their positions, including Ashford Prime's Chairman Monty Bennett," Sessa Capital's Managing Partner John Petry wrote in his letter. "Simply put, when faced with a proxy fight, Ashford Prime's incumbent directors sold nearly 13.3% of the Company's voting stock to a group of predominantly insiders for $43,750."
Sessa previously announced its intentions to nominate a slate of five directors for election at the company's 2016 annual meeting of shareholders.
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