Braemar Hotels & Resorts Inc. · NYSE:BHR
Braemar Hotels & Resorts — Ashford Hospitality Prime — Proxy Contest (May 2016)
26 slides from Braemar Hotels & Resorts's proxy contest presentation, May 11, 2016
Slide 1: Investor Presentation – May 2016
Investor Presentation – May 2016
Slide 2: Forward-looking statements
Certain statements and assumptions in this presentation contain or are based upon “forward-looking” information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties.
Slide 3: Background on Ashford Prime
Background on Ashford Prime 3 Ashford Hospitality Prime, Inc. ("Ashford Prime" or the "Company")(NYSE: AHP) was created in November 2013 through a spin-off of 8 high quality hotels from Ashford Hospitality Trust, Inc. ("Ashford Trust")(NYSE: AHT) The spin-off was a way to unlock value for stockh
Slide 4: Background on our Dispute with Sessa Capital
Background on our Dispute with Sessa Capital 4 History • Sessa began accumulating stock in March 2015 • Sessa’s tone became negative when pace of buybacks slowed • Sessa filed a 13D in September 2015 and demanded a unilateral reduction of the termination fee under the advisory agreements, which is n
Slide 5: Sessa's Reckless Proxy Contest
Sessa's Reckless Proxy Contest 5 NO ACTIONABLE PLAN SIGNIFICANT ECONOMIC CONSEQUENCES INEXPERIENCED AND UNQUALIFIED SLATE HOSTILE AND DYSFUNCTIONAL ENVIRONMENT SESSA'S RECKLESS PURSUIT OF CONTROL
Slide 6: AHP Believes Sessa's Campaign Is Reckless and Value Destructive
6 AHP BELIEVES SESSA'S CAMPAIGN IS RECKLESS AND VALUE DESTRUCTIVE The election of Sessa's slate will trigger a termination fee that is in the hundreds of millions of dollars, payable to AINC, the Company’s advisor, if Sessa’s slate is not first approved by the incumbent Board, which would significan
Slide 7: Strong Governance & Oversight from the Current Board
Strong Governance & Oversight from the Current Board 7 THIS BOARD HAS CONSISTENT TRACK RECORD OF MAXIMIZING SHAREHOLDER VALUE This Board has taken multiple steps to increase stockholder value: 1) Increased the common dividend from $0.05 per quarter to $0.12, a 140% increase 2) Bought back ~$30 mil
Slide 8: Strong Operational Performance
8 STRONG OPERATIONAL PERFORMANCE 7.3% RevPAR growth in 2015 was the highest amongst our peers Portfolio RevPAR of $199 is second amongst our peers 1.4% 3.3% 4.7% 5.7% 5.9% 7.3% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% LHO PEB DRH CHSP SHO AHP $162 $171 $186 $194 $199 $205 $150.00 $160.00 $170.00
Slide 9: Prudent, Accretive Growth
$140.20 $148.64 $171.35 $199.43 $0.00 $50.00 $100.00 $150.00 $200.00 $250.00 2012 2013 2014 2015 9 AHP Leadership Has Delivered Results in Prudent, Accretive Growth ACCRETIVE GROWTH OF HOTEL PORTFOLIO CONSERVATIVE CAPITAL STRUCTURE Acquired the Ritz-Carlton St. Thomas, Bardessono Hotel & Spa, Sofi
Slide 10: Returning Capital to Shareholders
10 $0.05 $0.10 $0.12 $0.00 $0.02 $0.04 $0.06 $0.08 $0.10 $0.12 $0.14 2013 Q2 15 2016 $0.26 $0.38 $0.00 $0.10 $0.20 $0.30 $0.40 Q1 15 Q1 16 AHP Leadership Has Delivered Results in Returning Capital to Shareholders Increased quarterly common dividend by 140% since spin-off Q1 2016 AFFO per share growt
Slide 11: Highly Aligned Management Team
15%* 5.7% 3.4% 3.3% 3.3% 2.3% 2.2% 1.9% 1.8% 1.3% 1.2% 0.8% 0.5% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% AHP HT RLJ CLDT FCH Peer Avg CHSP INN HST PEB DRH SHO LHO 11 HIGHLY ALIGNED MANAGEMENT TEAM Insider ownership of 15%, 6x more than hotel REIT industry average Insider ownership among
Slide 12: Maximizing Value is the #1 Objective of This Board
12 Maximizing Value is the #1 Objective of This Board THOROUGH AND DISCIPLINED STRATEGIC REVIEW PROCESS TO MAXIMIZE SHAREHOLDER VALUE In August of 2015, we announced a full review of strategic alternatives and engaged independent financial and legal advisors The Board reviewed a wide range of al
Slide 13: Benefits of the Ashford Structure
Benefits of the Ashford Structure 13 Structural Attractiveness • Publicly traded external advisor increases transparency and provides strong alignment • 7 member Board with 5 independent directors • Base Fee – based on AHP’s total enterprise value rather than book value • Incentive Fee paid only if
Slide 14: Sessa's Criticisms Are Misleading: Here are the Facts
Sessa's Criticisms Are Misleading: Here are the Facts 14 ALLEGED CONFLICTS OF INTEREST • Among highest insider ownership of any hotel REIT • Base fee based on enterprise value (not book value) • Incentive fee based on total return outperformance vs. peers • Five of Ashford Prime's seven directors ar
Slide 15: Sessa's Criticisms Are Misleading: Here are the Facts (Cont'd)
Sessa's Criticisms Are Misleading: Here are the Facts (Cont'd) 15 Sessa’s Criticisms Our Response ALLEGED WEAK CORPORATE GOVERNANCE • Sessa is not asking for governance changes but rather unilateral contractual changes with Ashford Inc. that the Company believes Ashford Inc. will not agree to • High
Slide 16: Sessa's Criticisms Are Misleading: Here are the Facts (Cont'd)
Sessa's Criticisms Are Misleading: Here are the Facts (Cont'd) 16 Sessa’s Criticisms Our Response PURCHASE OF AINC STOCK • Investment allows AHP shareholders to participate in the economics of AINC and we believe it will be an attractive investment for AHP • We viewed this as an attractive opportuni
Slide 17: The Sessa Slate of Proposed Directors Lacks Relevant Experience
17 The Sessa Slate of Proposed Directors Lacks Relevant Experience JOHN PETRY ZERO hospitality experience Lacks public company board experience Lacks corporate executive experience Lacks governance expertise Initiated unprovoked litigation with the Company Initiated unprovoked litigation
Slide 18: Current Board of Directors is Experienced and Qualified
Current Board of Directors is Experienced and Qualified Ashford Prime’s Independent Directors hold 5 out of the 7 Board seats and are wholly focused on value creation for stockholders 18 Aggregate 45 Years of Public Board Experience 13 years of public board experience Founder, Chairman, & CEO
Slide 19: Ashford Prime's Board is Highly Qualified and Experienced
Ashford Prime’s Board is Highly Qualified and Experienced 19 Real Estate and/or REIT Experience Lodging & Hospitality Experience Finance, M&A, and/or Legal Experience Public Board Experience Montgomery J. Bennett Curtis B. McWilliams Douglas A. Kessler Matthew D. Rinaldi
Slide 20: Ashford Prime's Management Team is Experienced and Qualified
Ashford Prime’s Management Team is Experienced and Qualified 20 Aggregate 139 Years of Relevant Industry Experience 27 years of hospitality experience 13 years with Ashford (14 years with Ashford predecessor) Cornell School of Hotel Administration BS Cornell S.C. Johnson MBA Montgomery J. Be
Slide 21: Management's Long Term Track Record of Creating Value at Ashford Trust
67% -15% -35% -8% 185% 49% 14% 48% 97% 42% 22% 128% 829% 105% 22% 44% Inception 10-Yr 9-Yr 8-Yr 7-Yr 6-Yr 5-Yr 4-Yr Peer Avg AHT Management's Long Term Track Record of Creating Value at Ashford Trust 21 (1) Since IPO on August 26, 2003 Peer average includes: CHSP, CLDT, DRH, FCH, HST, HT, INN, LHO,
Slide 22: Asset Management Expertise – Bardessono
Asset Management Expertise – Bardessono 22 Acquired in July 2015 2015 RevPAR of $564 62 keys, 1,350 sq. ft. of meeting space Located in Yountville, CA the “Culinary Capital of Napa Valley” High barrier to entry market One of only three LEED Platinum certified hotels in the U.S., only hot
Slide 23: Asset Management Expertise – Pier House
Asset Management Expertise – Pier House 23 Asset management performance significantly exceeded underwriting Eliminated $1.5mm in expenses through cost cutting initiatives: Right-sized staffing level Implemented improved housekeeping practices Identified additional F&B efficiencies Realiz
Slide 24: Asset Management Expertise – Ritz St. Thomas
Asset Management Expertise – Ritz St. Thomas 24 The Ritz-Carlton St. Thomas Acquired in December 2015 180 keys, 10,000 sq. ft. of meeting space Acquisition completed at favorable metrics of 7.2x TTM EBITDA and 10% TTM NOI cap rate Located in St. Thomas in the U.S. Virgin Islands with high ba
Slide 25: Key Takeaways
Key Takeaways 25 Current Board is committed to maximizing value and recently completed a thorough review of strategic alternatives Electing the current Board will NOT trigger termination fee in the hundreds of millions of dollars which could significantly destroy shareholder value Current Board is h
Slide 26: Investor Presentation – May 2016
Investor Presentation – May 2016