Braemar Hotels & Resorts Inc. · NYSE:BHR
Braemar Hotels & Resorts — Ashford Hospitality Prime — Proxy Contest (May 2016)
27 slides from Braemar Hotels & Resorts's proxy contest presentation, May 11, 2016
Slide 1: News Release: Ashford Prime Files Investor Presentation
NEWS RELEASE Contact: Mike Geller Trevor Gibbons Marilynn Meek Edelman Edelman Financial Relations Board (212) 729-2163 (212) 704-8166 (212) 827-3773 ASHFORD PRIME FILES INVESTOR PRESENTATION DALLAS, May 11, 2016 -- Ashford Hospitality Prime, Inc., (NYSE: AHP) (“Ashford Prime” or the “Company”) toda
Slide 2: Investor Presentation – May 2016
Investor Presentation – May 2016
Slide 3: 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 4: 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 stockholder
Slide 5: Background on our Dispute with Sessa Capital
Background on our Dispute with Sessa Capital 4 History Sessa began accumulating stock in March 2015Sessa’s tone became negative when pace of buybacks slowedSessa filed a 13D in September 2015 and demanded a unilateral reduction of the termination fee under the advisory agreements, which is not possi
Slide 6: 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 7: 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 8: 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:Increased the common dividend from $0.05 per quarter to $0.12, a 140% increase Bought back ~$30 million of s
Slide 9: Strong Operational Performance
8 STRONG OPERATIONAL PERFORMANCE 7.3% RevPAR growth in 2015 was the highest amongst our peersPortfolio RevPAR of $199 is second amongst our peers AHP Leadership Has Delivered Results in Operational Excellence
Slide 10: Delivered Results in Prudent, Accretive Growth
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, Sofitel Chicago, & Pier House ResortIncreased portfolio RevPAR since spin-off by over 40% to $199 as of
Slide 11: Delivered Results in Returning Capital to Shareholders
10 AHP Leadership Has Delivered Results in Returning Capital to Shareholders Increased quarterly common dividend by 140% since spin-off Q1 2016 AFFO per share growth of over 45% Disciplined Capital Strategies Weighted Average Interest Rate Decreased weighted average interest rate by 60 bps since 201
Slide 12: Highly Aligned Management Team
11 HIGHLY ALIGNED MANAGEMENT TEAM Insider ownership of 15%, 6x more than hotel REIT industry averageInsider ownership among the highest of its peersManagement has significant personal wealth invested in the CompanyIncentive fee based on AHP total return outperformance vs. its peersManagement can ear
Slide 13: 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 advisorsThe Board reviewed a wide range of alterna
Slide 14: Benefits of the Ashford Structure
Benefits of the Ashford Structure 13 Structural Attractiveness Publicly traded external advisor increases transparency and provides strong alignment7 member Board with 5 independent directorsBase Fee – based on AHP’s total enterprise value rather than book valueIncentive Fee paid only if total stock
Slide 15: 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 REITBase fee based on enterprise value (not book value)Incentive fee based on total return outperformance vs. peersFive of Ashford Prime's seven directors are independe
Slide 16: Sessa's Criticisms Are Misleading (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 toHighly-qu
Slide 17: Sessa's Criticisms Are Misleading (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 AHPWe viewed this as an attractive opportunity to
Slide 18: The Sessa Slate Lacks Relevant Experience
17 The Sessa Slate of Proposed Directors Lacks Relevant Experience JOHN PETRY ZERO hospitality experienceLacks public company board experienceLacks corporate executive experienceLacks governance expertiseInitiated unprovoked litigation with the CompanyInitiated unprovoked litigation with the Company
Slide 19: 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 experienceFounder, Chairman, & CEO of AHP
Slide 20: 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 21: 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 experience13 years with Ashford (14 years with Ashford predecessor)Cornell School of Hotel Administration BSCornell S.C. Johnson MBA Montgomery J. BennettChief
Slide 22: Management's Long Term Track Record of Creating Value
Management's Long Term Track Record of Creating Value at Ashford Trust 21 Since IPO on August 26, 2003Peer average includes: CHSP, CLDT, DRH, FCH, HST, HT, INN, LHO, RLJ, SHOReturns as of 1/11/16Source: SNL Total Stockholder Return Significant long-term outperformance proves management's ability to
Slide 23: Asset Management Expertise – Bardessono
Asset Management Expertise – Bardessono 22 Acquired in July 20152015 RevPAR of $56462 keys, 1,350 sq. ft. of meeting spaceLocated in Yountville, CA the “Culinary Capital of Napa Valley”High barrier to entry marketOne of only three LEED Platinum certified hotels in the U.S., only hotel in California2
Slide 24: Asset Management Expertise – Pier House
Asset Management Expertise – Pier House 23 Asset management performance significantly exceeded underwritingEliminated $1.5mm in expenses through cost cutting initiatives: Right-sized staffing levelImplemented improved housekeeping practicesIdentified additional F&B efficienciesRealized synergies wit
Slide 25: Asset Management Expertise – Ritz St. Thomas
Asset Management Expertise – Ritz St. Thomas 24 The Ritz-Carlton St. Thomas Acquired in December 2015180 keys, 10,000 sq. ft. of meeting spaceAcquisition completed at favorable metrics of 7.2x TTM EBITDA and 10% TTM NOI cap rateLocated in St. Thomas in the U.S. Virgin Islands with high barriers to e
Slide 26: 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 27: Investor Presentation – May 2016
Investor Presentation – May 2016