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And consolidation in the hotel industry continues. Now, the only question left is whether Blackstone can get returns on its LaSalle investment like it did with Hilton.

LaSalle Hotel Properties has picked Blackstone Group LP as its preferred suitor, thwarting months of efforts by Pebblebrook Hotel Trust to buy the luxury-hotel owner, most recently for more than $4 billion.

LaSalle’s board deemed a June 11 offer from Pebblebrook “substantially similar” to one it rejected before accepting Blackstone’s bid of $33.50 a share, according to people with knowledge of the matter. The people added that the board believed Pebblebrook’s offer “does not constitute, and could not reasonably be expected to lead to, a superior proposal” to Blackstone’s.

Pebblebrook’s offer remains mainly stock-based. Because the value of that stock could fluctuate, and Pebblebrook has so far declined to include a price-protection mechanism, such as a collar, the bid exposes LaSalle shareholders to a kind of uncertainty that Blackstone’s all-cash offer eliminates, said the people, who declined to be named because the information is private.

To close, the Blackstone deal now needs approval from two-thirds of LaSalle’s shareholders. Pebblebrook could also raise its offer yet again.

Pebblebrook’s revised proposal was similar to one it disclosed last month. The fresh bid still called for a fixed exchange ratio of 0.92 Pebblebrook shares for each LaSalle share. But it locked in a cash value of $37.80, based on its five-day volume-weighted average price through June 8, that investors could opt to receive, capped at 20 percent of the deal’s value. Previously, that amount was $35.03. The revised offer also took into account the $112 million termination fee LaSalle would have had to pay Blackstone.

The prospect of a Pebblebrook deal has helped LaSalle’s stock stay consistently above Blackstone’s $33.50-a-share offer since that deal was announced on May 21. HG Vora Capital Management LLC, LaSalle’s third-largest shareholder, with a 9.1 percent stake, said last week that it viewed Pebblebrook’s offer as superior.

A deal between the two hotel companies, both based in Bethesda, Maryland, would have combined LaSalle’s 41 hotels — including Gild Hall and the Roger in New York, L’Auberge Del Mar in California and the Marker San Francisco — with Pebblebrook’s 28 properties.

©2018 Bloomberg L.P. This article was written by Gillian Tan from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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Photo Credit: The Marker San Francisco is one of 41 hotels owned by LaSalle. sk / Flickr