(Reuters) - Hotel owner Park Hotels & Resorts Inc on Monday agreed to buy smaller rival Chesapeake Lodging Trust in a cash and stock deal valued at $2.7 billion that would create the second biggest lodging real estate investment trust in the United States.
Park's offer of $31.71 per share represents a premium of about 8 percent to Chesapeake Lodging's closing price on Friday.
The merged entity will have an enterprise value of about $12 billion, following the close of the deal by fourth quarter of 2019, and is closely behind No.1 Host Hotels & Resorts (NYSE:HST) Inc's enterprise value of about $17.7 billion, Park Hotels said.
Park's portfolio of properties consists of 51 premium-branded hotels and resorts, which have more than 30,000 rooms located in prime U.S. markets.
Chesapeake Lodging owns 20 hotels, which have a total of 6,288 rooms in eight U.S. states and the District of Columbia.
BofA Merrill Lynch and Barclays (LON:BARC) were financial advisers to Park Hotels, while Hogan Lovells acted as legal counsel.
J.P. Morgan Securities was financial adviser to Chesapeake, and Paul, Weiss, Rifkind, Wharton & Garrison LLP and Polsinelli PC acted as legal counsel.