DEFA14A: Braemar Hotels & Resorts Urges Shareholders to Disregard Blackwells Capital's Proxy Materials

Braemar Hotels & Resorts advises shareholders to discard proxy materials from Blackwells Capital, deeming them unlawful, and to await the company's official proxy materials for the upcoming annual meeting.

Summary

• Braemar Hotels & Resorts is urging shareholders to disregard proxy materials received from Blackwells Capital in connection with the 2024 Annual Meeting of Stockholders scheduled for May 15, 2024.
• The Board of Directors has determined that Blackwells' Nomination Notice was invalid due to false statements and material omissions.
• Braemar believes Blackwells is attempting an underhanded takeover at a price significantly below intrinsic value.
• The company has filed a lawsuit against Blackwells to prevent their proxy solicitation.
• Braemar's iconic portfolio delivered the highest RevPAR in the publicly traded lodging REIT industry during fiscal year 2023, generating approximately $307 compared to the peer average of approximately $196.
• Since its founding in 2014 through fiscal year 2023, Braemar delivered RevPAR growth of approximately 79%, outperforming the full-service lodging REIT peer average growth of approximately 28%.
• The company has refinanced or extended nearly all of its 2024 debt maturities totaling approximately $300 million.
• Braemar's portfolio delivered a hotel EBITDA per key of approximately $49,200 in fiscal year 2023, ahead of the peer average of approximately $35,700.
• Since 2013, Braemar has acquired 11 hotels that have delivered an attractive average yield on cost of 8.5% on a trailing 12-month basis as of December 31, 2023.

Sentiment

Score: 7

Explanation: The document conveys a positive outlook regarding the company's performance and strategy, but the ongoing proxy fight with Blackwells Capital introduces uncertainty and risk.

Positives

• Braemar achieved the highest RevPAR in its industry peer group.
• The company has demonstrated strong RevPAR growth since its founding.
• Braemar has successfully managed its debt maturities.
• The company's EBITDA per key is above the peer average.
• Braemar's acquisitions have delivered attractive yields.

Negatives

• Blackwells Capital is attempting to gain control of the company, which Braemar management views as an underhanded takeover attempt.
• Braemar has filed a lawsuit against Blackwells Capital.

Risks

• The company faces a proxy fight with Blackwells Capital.
• The outcome of the lawsuit against Blackwells Capital is uncertain.
• Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially.

Future Outlook

The company is committed to maximizing value for shareholders and is excited about significant growth opportunities as it continues to invest in premium-branded and high-quality independent luxury hotels and resorts.

Management Comments

• We remain fully committed to maximizing value for you and are excited about the Company's significant growth opportunities as we continue to invest in premium-branded and high-quality independent luxury hotels and resorts.
• Your Board has unanimously determined that Blackwells proxy campaign is invalid and recommends that you discard any white proxy card you receive from Blackwells.
• The Braemar Board strongly recommends that you disregard the white proxy card sent to you by Blackwells and to wait for the Company's proxy materials, including the GOLD proxy card, which will be sent to you in the near term.

Industry Context

Braemar operates in the lodging REIT industry and competes with other REITs such as HST, RHP, PEB, SHO, XHR, DRH, and PK. The company highlights its superior RevPAR and EBITDA per key compared to its peers.

Comparison to Industry Standards

• Braemar's RevPAR of approximately $307 in fiscal year 2023 was the highest among publicly traded lodging REITs, surpassing the peer average of approximately $196.
• Braemar's RevPAR growth of approximately 79% since 2014 significantly outperformed the full-service lodging REIT peer average growth of approximately 28%.
• The company's hotel EBITDA per key of approximately $49,200 in fiscal year 2023 exceeded the peer average of approximately $35,700.

Legal Proceedings

• The Company has filed a lawsuit against Blackwells in order to protect your investment and prevent Blackwells from proceeding with its illegal proxy solicitation to seize control of the Braemar Board.

Stakeholder Impact

• Shareholders are directly impacted by the proxy fight and the outcome of the vote at the annual meeting.
• The company's performance and strategy affect the value of shareholder investments.

Next Steps

• Shareholders are advised to wait for the company's proxy materials and GOLD proxy card.
• The company will hold its 2024 Annual Meeting of Stockholders on May 15, 2024.

Key Dates

Keywords

proxy, Blackwells Capital, shareholders, RevPAR, EBITDA, debt, Braemar Hotels & Resorts, hotels, REIT