Argentine real estate company IRSA Inversiones y Representaciones announced the closing of the acquisition of an equity stake in Supertel Hospitality Inc., a real estate investment trust in the US publicly listed on NASDAQ. Supertel owns over 100 mid-scale and long-staying hotels in 23 States on the U.S. operating under operators or franchise brands such as Super 8, Comfort Inn, Days Inn, Hampton Inn, and Holiday Inn Express. The acquisition was conducted through Real Estate Strategies L.P. (RES), a vehicle controlled and managed by IRSA, which purchased 3,000,000 Series C convertible preferred shares issued by Supertel for a total amount of U$S 30,000,000. Based on such acquisition, RES has become Supertel´s largest shareholder with a 34% stake. The abovementioned shares will bear preferred dividends on 6.25 % annual basis and have the same political rights as the ordinary shares. Additionally, and subject to certain limitations, the aforementioned shares will be convertible into ordinary shares at a 1/10 rate for a period of 5 years. The Investment Agreements included: Terms of the Preferred Stock and Stock Purchase, Investor Rights, Conversion, Registration Rights, Directors Designation as well as Warrant Agreements. As part of the Investment Agreements, RES: (i) received warrants to affect to the purchase of 30 million additional common shares, which may be exercised at any time during the 5 years period following to the closing of the transaction (with forced exercise under determined conditions after 3 years of the closure), at a price of U$S 1.20 per share; (ii) is entitled to appoint up to 4 directors out of a total of 9; (iii) was granted Preemptive Rights for future public offerings. Zang, Bergel & Viñes Abogados is IRSA’s regular counsel in Argentina. Partner Pablo Vergara del Carril says it was an unusual challenge to advise a Latin American company on an investment in a publicly listed US company, adding that closing the deal “shows the consolidation of IRSA’s expansion into the US, as well as its ability to close an M&A transaction involving public companies in a challenging economic environment”. Counsel to IRSA Zang, Bergel & Viñes Abogados Partner Pablo Vergara del Carril, and associates Alejandro Contreras and Pablo Schreiber Counsel to Supertel Hospitality McGrath North Mullin & Kratz Partners Guy Lawson, Jason Benson and David Hefflinger
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