Innkeepers USA to Be Acquired
By Apollo for About $800 Million

Hotel real estate investment trust Innkeepers USA Trust agreed to be acquired by an affiliate of Apollo Investment Corp. for $17.75 a share, or about $800 million, excluding debt.

This represents a 7.9% premium to Friday's closing price of $16.45. In premarket trading, Innkeepers' shares were trading at $17.50.

Innkeepers, which owns hotel properties including Residence Inns, Summerfield Suites and Hampton Inns, said following the deal's closing, expected in the second quarter, the properties will be managed by an affiliate of Jeffrey H. Fischer, Innkeepers chief executive and president.

Innkeepers, which owns 74 hotels and had 2006 net income of $30.6 million, or 42 cents a share, will pay its first quarter dividend on April 24 but will suspend further dividend payments.

Numerous REITs have been taken private the past several years with the hunger for commercial real estate still unabated and interest rates still relatively low. Most real-estate experts predicted the merger activity in the sector would continue this year. Investors continue to clamor for positions in commercial real estate, seeing it as both a necessary counterweight to the stocks and bonds they hold and as a hedge against inflation.

Apollo Management, the parent company of Apollo Investment, on Friday secured backing from the shareholders of Countrywide PLC for its revised 1.05 billion pounds, takeover of the U.K. real estate agency. The private-equity firm also closed its $6.6 billion acquisition of U.S. real-estate brokerage group Realogy Corp. late last month.

Lehman Brothers and USB Investment Bank are serving as financial advisers to Innkeeper, while JF Capital Advisors is serving as financial adviser to Apollo Investment.

-- Kevin Kingsbury contributed to this article.

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