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Summit Hotel Properties, Inc. (NYSE:INN), a publicly traded real estate investment trust currently valued at $532.57 million, announced today that it has filed a prospectus supplement with the United States Securities and Exchange Commission (SEC). According to InvestingPro data, the company maintains a strong 7.34% dividend yield and trades at attractive valuation multiples, suggesting potential value opportunity for investors. The supplement pertains to the company’s existing shelf registration statement on Form S-3 and concerns the potential offer and sale of up to 12,940,877 shares of common stock by a selling stockholder.
The shares in question are linked to common units of limited partnership (OP Units) of Summit Hotel OP, LP, the operating partnership of Summit Hotel Properties. Holders of the OP Units have the right to request the company to redeem their units for cash or, at the company’s discretion, exchange them for common stock on a one-for-one basis. With the stock currently trading at $4.36, InvestingPro analysis indicates the company is undervalued, with 13 additional key insights available to subscribers through their comprehensive Pro Research Report.
If the OP Unit holders opt for redemption, and if Summit Hotel Properties chooses to issue shares of common stock instead of cash, the potential sale of these shares could occur. The company has clarified that it will not receive any proceeds from the sale of common stock by the selling stockholders.
The SEC filing includes opinions from Venable LLP and Latham & Watkins LLP regarding the validity of the common stock that may be issued upon redemption of the OP Units. Summit Hotel Properties has not disclosed the identity of the selling stockholder or the timing of any potential stock sales.
This announcement is based on the information detailed in the SEC filing by Summit Hotel Properties, Inc. on May 2, 2025.
In other recent news, Summit Hotel Properties reported its first-quarter 2025 earnings, revealing a miss in both earnings per share (EPS) and revenue compared to market forecasts. The company posted an EPS of -$0.04, falling short of the anticipated -$0.02. Revenue for the quarter was $184.48 million, slightly below the forecasted $185.37 million. Despite these misses, Summit Hotel Properties completed significant renovations and reduced operational expenses, which may bolster its competitive position moving forward.
In addition, the company announced the completion of the transformational renovation of its Courtyard on the beach of Fort Lauderdale, now renamed the Courtyard by Marriott Oceanside, Fort Lauderdale Beach. The company also highlighted a 1.5% year-over-year increase in Revenue Per Available Room (RevPAR), with its urban portfolio outperforming the industry with nearly 3% RevPAR growth. However, challenges remain in the government and international travel segments, along with a compressed booking window.
Summit Hotel Properties has been proactive in managing expenses, with adjusted EBITDA reported at $45 million and adjusted FFO at $27.4 million, or $0.22 per share. The company also announced a $50 million share repurchase program, reflecting confidence in its long-term outlook despite current market volatility. Analyst firms like KeyBanc Capital Markets and Deutsche Bank (ETR:DBKGn) have been engaging with the company to understand these developments better.
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