Ashford Hospitality Responds To Activist Investor, Highlights 'Failure To Describe Any Actionable Strategy'

Ashford Hospitality Prime Inc AHP announced in early April that its board of directors have concluded a strategic review process. The board concluded that while it has received interest from strategic buyers, none of the offers "would provide adequate value to shareholders." Instead, the board announced a series of initiatives to drive shareholder value.

Sessa Capital, an activist investor and major shareholder of Ashford Hospitality responded in a public letter on April 14. Among other things, the activist investor said that the company's "incumbent directors admitted that the Company's strategic alternatives process has produced nothing" and "the takeaway from the process was the incumbent directors' announcement of an array of unconvincing 'initiatives.'"

Related Link: Ashford Hospitality Concludes Strategic Review Process, Says None Of The Received Offers Provides "Adequate Value" To Shareholders

In return, Ashford Hospitality issued a response late Monday afternoon. The company went on the offensive and countered Sessa's demands for board representation, and stated, "Sessa has proposed what the Company believes is an inexperienced and unqualified slate, has submitted incomplete nominating materials and has refused to allow its purported nominees to meet with the board's governance committee absent inappropriate restrictions."

Ashford Hospitality added that it "remains committed to acting in the best interests of its stockholders and will not be swayed from doing so by unfounded accusations asserted by Sessa."

Finally, Ashford Hospitality concluded that it "will not shirk their fiduciary duty to stockholders by approving purported nominees that have not been properly vetted and have failed to comply with Company bylaws."

Shares of Ashford Hospitality showed no trades early Tuesday morning, but lost more than 3 percent on Monday to close at $11.00.