Blackwells Capital LLC (“Blackwells”), a shareholder of Braemar
Hotels & Resorts Inc. (“Braemar” or the “Company”) (NYSE: BHR)
has filed a definitive proxy statement with the Securities and
Exchange Commission (the “SEC”) in connection with its nomination
of four highly qualified candidates—Jennifer M. Hill, Betsy L.
McCoy, Steven J. Pully and Michael Cricenti (collectively, the
“Blackwells Nominees”)—for election to the board of directors of
Braemar (the “Board”) at the Company’s 2024 annual meeting of
shareholders (the “2024 Annual Meeting”) to be held on May 15,
2024.
Jason Aintabi, Chief Investment Officer of
Blackwells, said:
“Braemar is in a pitiful state. Despite its
exceptional assets, Monty Bennett’s failed leadership has had
shareholders suffer through an almost 90% decline in share price
over the last 10 years.i During the same period, management fees
paid to Ashford Hospitality Advisors, LLC (“Ashford LLC”), have
grown by over 575%.ii,iii Braemar has become a
thinly traded microcap stock with a measly $133 million market
capitalization.iv Astonishingly, the termination fee Mr. Bennett
and Ashford think they are owed—after having presided over this
disaster—outstrips the entire market value of Braemar.v If
this is not corporate piracy, we simply do not know what
is.
Several months ago, Blackwells called on Braemar
to investigate potential breaches of fiduciary duty and/or other
wrongdoing by the Board and/or management in connection with the
Company’s relationship with Monty Bennett and Ashford. Blackwells
also made a proposal to acquire Braemar in an offer that provided
for a termination fee payable to Mr. Bennett of $35 million—a
fraction of what we believe Mr. Bennett thinks he and Ashford are
owed.vi Another institution may have recently made an offer to
acquire Braemar, which Blackwells believes the Board of Braemar,
perhaps under Mr. Bennett’s orders, swept under the rug as
well.vii
The Braemar Board could have pursued a range of
options beneficial to shareholders, including, among others:
- Engage in good faith with
Blackwells on its proposal;
- Engage with the other institution
that recently made an offer to acquire Braemar;
- Run a proper sale process to seek
the highest value for shareholders; and,
- Compel Mr. Bennett and Ashford to
“come down to earth” and reduce their termination fee, which we
currently estimate as being substantially more
than the entire market value of Braemar.
Instead of acting in shareholders’ best
interests as independent fiduciaries must, and in the face of
Blackwells’ impending director nominations, the Board and Mr.
Bennett chose to:
- Modify the Company’s Bylaws (the
“Bylaws”) to require extensive disclosure in connection with
director nominations, such that Blackwells’ nomination materials
required the submission of a 445-page document package;
- File suit against Blackwells, its
affiliates and its nominees in U.S. Federal Court to obstruct
Blackwells’ nominations;
- Hire a law firm that we understand
has a history of personal business with Mr. Bennett to whitewash
and obstruct Blackwells’ demand for an independent investigation;
and
- Use the “newspaper” Mr. Bennett
publishes, The Dallas Express, to publish defamatory articles about
Blackwells’ CIO, Jason Aintabi.
Blackwells believes Mr. Bennett’s behavior
disqualifies him from being involved in any public company. More
problematic still, is the ever-ballooning fee stream he and his
affiliates derive from Braemar—having increased from approximately
$9 million in 2013 to a whopping $61 million in 2023.viii These
fees represent almost half of the entire market
value of Braemar, and have nearly doubled in the last two years
alone.ix,x As one might imagine, Braemar’s ‘conflicts committee’ is
the subject of much examination by Blackwells, as will be revealed
in upcoming materials.
Mr. Bennett can commission childish articles
about Blackwells and its principals, he can continue to drive
shareholders away from the real issues, and file meritless
litigation meant to preserve his gravy train. This will not change
the fact that Mr. Bennett must be removed from his roles at
Braemar, and the external management agreement that Blackwells
believes turns the Company into his personal “piggybank” must be
terminated.
Braemar’s current directors have cowered to poor
governance practices, and have permitted the Company’s management
to entrench themselves at the expense of shareholder value. The
Blackwells Nominees possess the skills necessary to transform the
Board and business of Braemar, unlocking value for shareholders
that the Board has incessantly decimated over the past decade.
We encourage shareholders to review our
materials, the details of our engagement with the Company and other
information at www.NoMoreMonty.com.
About the Blackwells
Nominees
Jennifer M. Hill, currently
serves as the Founder and CEO of Murphy Hill Consulting LLC, a
Connecticut-based consulting business providing consulting services
focused on the financial services, asset management, insurance and
risk management industries, since January 2015. Ms. Hill served as
the Chief Financial Officer of Bank of America Merrill Lynch, an
investment bank and financial services holding company, from July
2011 to December 2014.xi
Betsy L. McCoy, currently
serves as General Counsel and Vice President for The Related Group,
a private real estate development company, a position she has
served in since May 2010. In her role, Ms. McCoy oversees the
in-house legal department, including all aspects of compliance,
management of legal services, legal reporting to executives, and
legal guidance and as legal and business counsel to an affiliated
real estate management company. From January 2008 to May 2013, Ms.
McCoy served as Associate General Counsel and Vice President of The
Related Group.
Steven J. Pully, serves on
public and private company boards, he provides investment banking
and consulting services through Speyside Partners LLC, an
investment banking firm he co-founded in 2017, and he serves as an
expert witness in legal disputes, generally in connection with his
expertise in governance matters. Over the course of his board
service, he has served on boards of companies involved in a variety
of different industries, he has served as Executive Chairman,
Chairman, and Lead Director of various boards, and he has chaired a
variety of board committees.
Michael Cricenti, currently
serves as Managing Partner and Chief Investment Officer of Magis
Capital Partners, a private investment firm that employs a
fundamental, value-oriented approach to investing in special
situations, since January 2017. Mr. Cricenti also served as a
Senior Real Estate Investment Advisor at IsZo Capital Management
LP, a hedge fund, from January 2017 to November 2021. Previously,
from September 2009 until January 2017, Mr. Cricenti served as
Managing Director at Bluestem Asset Management (“Bluestem”), an
investment firm with more than $1.5 billion in assets under
management based in Charlottesville, Virginia.
About the Blackwells
Proposals
Blackwells seeks Braemar shareholder support on
proposals that include:
- The election of each Blackwells
director nominees—Michael Cricenti, Jennifer M. Hill, Betsy L.
McCoy and Steven J. Pully;
- The amendment of the Bylaws to
remove the recently adopted provision that Blackwells believes is
unlawful;
- The amendment of the Bylaws to
preclude any current or former employee, director, officer, or
control person of the Company or Ashford Inc. and Ashford’s
affiliates from serving as the Company’s chairman of the
Board;
- The requirement that the Board
disclose all extraordinary transaction proposals made by
shareholders, affiliates and third parties during the two most
recently completed calendar years and the terms of those proposed
transactions; and
- The requirement that the Board
disclose all compensation paid by the Company to members of the
Bennett family, The Dallas Express and employees, directors or
agents of The Dallas Express, including Louis Darrouzet.
About Blackwells Capital
Blackwells Capital was founded in 2016 by Jason
Aintabi, its Chief Investment Officer. Since that time, it has made
investments in public securities, engaging with management and
boards, both publicly and privately, to help unlock value for
stakeholders, including shareholders, employees and communities.
Throughout their careers, Blackwells’ principals have invested
globally on behalf of leading public and private equity firms and
have held operating roles and served on the boards of media,
energy, technology, insurance and real estate enterprises. For more
information, please visit www.blackwellscap.com.
Contacts
ShareholdersMacKenzie Partners, Inc.Toll Free: +1 (800)
322-2885proxy@mackenziepartners.com
MediaGagnier CommunicationsDan Gagnier & Riyaz
Lalani646-569-5897blackwells@gagnierfc.com
IMPORTANT ADDITIONAL INFORMATION
Blackwells, Blackwells Onshore I LLC, Jason
Aintabi, Michael Cricenti, Jennifer M. Hill, Betsy L. McCoy and
Steven J. Pully (collectively, the “Participants”) are participants
in the solicitation of proxies from the shareholders of the
Corporation for the 2024 Annual Meeting. On April 3, 2024, the
Participants filed with the SEC their definitive proxy statement
and accompanying WHITE proxy card in connection
with their solicitation of proxies from the shareholders of the
Corporation.
ALL SHAREHOLDERS OF THE CORPORATION ARE
ADVISED TO READ THE DEFINITIVE PROXY STATEMENT, THE ACCOMPANYING
WHITE UNIVERSAL PROXY CARD AND OTHER DOCUMENTS RELATED TO THE
SOLICITATION OF PROXIES BY THE PARTICIPANTS, AS THEY CONTAIN
IMPORTANT INFORMATION, INCLUDING ADDITIONAL INFORMATION RELATED TO
THE PARTICIPANTS AND THEIR DIRECT OR INDIRECT INTERESTS IN THE
CORPORATION, BY SECURITY HOLDINGS OR OTHERWISE.
The definitive proxy statement and an
accompanying WHITE universal proxy card will be
furnished to some or all of the Corporation’s shareholders and are,
along with other relevant documents, available at no charge on the
SEC’s website at http://www.sec.gov/. In addition, the Participants
will provide copies of the definitive proxy statement without
charge, upon request. Requests for copies should be directed to
Blackwells.
_________________________
i Capital IQ Pro from March 28, 2014 to the
unaffected share price on March 28, 2024.ii Ashford LLC is a
subsidiary of Ashford Inc. (together, “Ashford”).iii Based on (i) a
combined total of (A) advisory services fees paid to Ashford of
approximately $31.1 million, as disclosed in Braemar’s Annual
Report for the year ended December 31, 2023, filed on Form 10-K
with the SEC on March 14, 2024 (the “2023 Form 10-K”), (B)
additional fees for products and services provided by Ashford (or
entities in which Ashford has an interest) of approximately $30.2
million, as disclosed in the 2023 Form 10-K, and (C) an estimated
cash management fee paid to Ashford of approximately $171,000,
based on 20 bps of the year-end cash and cash equivalents balance
for the year ended December 31, 2023 compared to (ii) approximately
$9.1 million (calculated by annualizing the total advisory
fees paid to Ashford from November 19, 2013 through December 31,
2013, as disclosed in Braemar’s Annual Report for the year ended
December 31, 2013, filed on Form 10-K with the SEC on March 31,
2014).ivCapital IQ Pro; based on the unaffected share price as of
March 28, 2024.vEstimated termination fee varies depending on
interpretation of the Fifth Amended and Restated Advisory
Agreement, dated April 23, 2018, by and between Braemar, Braemar
TRS Corporation, and Ashford LLC (as amended, the “Advisory
Agreement”), as filed as Exhibit 10.2 to the 2023 Form 10-K. As
stated in the Advisory Agreement the termination fee may be
calculated to be an amount equal to (A) twelve multiplied by (B)
the sum of (I) Net Earnings for the LTM Period; plus (II) to the
extent not included in Net Earnings, any Incentive Fees that have
accrued or are accelerated but have not yet been paid at the
Termination Payment Time (each term as defined in the Advisory
Agreement). Net Earnings is defined in the Advisory Agreement as
(i) the total Base Fees and Incentive Fees, plus any other revenues
reported on the Advisor’s income statement as pertaining to this
Amended Agreement, in each case, in accordance with GAAP, including
all EBITDA of the Advisor and any of its Affiliates and Majority or
Minority Subsidiaries from providing any Additional Services to the
Company, the Operating Partnership or any of their Affiliates or
Subsidiaries, less (ii) the total incremental expenses (each term
as defined in the Advisory Agreement). At a minimum, we estimate
that the termination fee is equal to twelve multiplied by the 2023
Base Fee of $13.9 million.vi For correspondence regarding
Blackwells’ proposed termination fee in connection with its
acquisition proposal and the Company’s response, please see Exhibit
2 to the Soliciting Materials filed on Form DFAN by Blackwells on
March 29, 2024, available at
https://www.sec.gov/Archives/edgar/data/1574085/000121390024027997/ea020276001-dfan14a_black.htm.
vii
Braemar Hotels & Resorts Inc. v. Blackwells Capital LLC, et al., 3:24-cv-707-L, Compl. at 88.viii
See endnote iii.ix Capital IQ Pro; based on the unaffected market
capitalization of $133 million as of March 28, 2024.x The 2023 Form
10-K at 144, 146 and 147.xi Bank of America Merrill Lynch was the
marketing name for a division of Bank of America.
Braemar Hotels and Resorts (NYSE:BHR)
過去 株価チャート
から 4 2024 まで 5 2024
Braemar Hotels and Resorts (NYSE:BHR)
過去 株価チャート
から 5 2023 まで 5 2024