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Strategies & Market Trends : Value Investing
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To: Ccube who wrote (78375)10/27/2025 9:15:02 PM
From: E_K_S1 Recommendation

Recommended By
Area51

  Read Replies (2) of 78397
 
Below are the three Preferreds for SOHO.

Note the Take Private offer valued only at $46.1 million; the value of the preferreds if paid off at PAR $25 is $103.6 million ( plus a significant amount of cumulative dividends in arrears ) and $320-$340 million in total debt mortgage on the properties.

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Sotherly Hotels LP (SOHOO) 18.05 +6.83 (+60.87%) 16.16x ADV
7.87% Preferred

Sotherly Hotels, 7.875% Series C Cumulative Redeemable Perpetual Preferred StockTicker Symbol: SOHOO
Upon the occurrence of a change of control the company will have the option within 120 days to redeem the preferred shares at $25 per share plus accrued and unpaid dividends. If the company has exercised their redemption right, the holders will NOT have the following conversion right. Upon the occurrence of a change of control, and the company has NOT provided notice that they intend to redeem the preferred shares, the holder will have the right to convert the preferred shares into common shares under certain circumstances (see the prospectus for details).
Sotherly Hotels Inc Perp Pfd Ser D (SOHON) 17.06 +5.16 (+43.36%) 13.58x ADV
8.25% Preferred

Sotherly Hotels Inc. - 8.25% Series D Cumulative Redeemable Perpetual Preferred Stock

Upon the occurrence of a change of control the company will have the option within 120 days to redeem the preferred shares at $25 per share plus accrued and unpaid dividends. If the company has exercised their redemption right, the holders will NOT have the following conversion right. Upon the occurrence of a change of control, and the company has NOT provided notice that they intend to redeem the preferred shares, the holder will have the right to convert the preferred shares into common shares under certain circumstances (see the prospectus for details).
Sotherly Hotels Inc 8.0% Series B Cumulative Re (SOHOB) 17.60 +5.62 (+46.91%) 12.66x ADV
8% Preferred
Sotherly Hotels Inc. - 8.0% Series B Cumulative Redeemable Perpetual Preferred Stock

Upon the occurrence of a change of control the company will have the option within 120 days to redeem the preferred shares at $25 per share plus accrued and unpaid dividends. If the company has exercised their redemption right, the holders will NOT have the following conversion right. Upon the occurrence of a change of control, and the company has NOT provided notice that they intend to redeem the preferred shares, the holder will have the right to convert the preferred shares into common shares under certain circumstances (see the prospectus for details).
ADV = Average Daily Volume

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The Question is if the Private Equity firm decides to NOT redeem the preferred shares. Then do they still stay listed so they can be sold? What stops Private Equity from just not paying the dividend when they go private? These preferreds are not colateralized by the Hotel properties like traditional mortgage debt is.

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  • Total Debt: Sotherly Hotels had approximately $320-$340 million in total debt as of recent filings.

  • Total Preferred Liability (at Par): The total liquidation preference for all three series is approximately $103.6 million, plus a significant amount of cumulative dividends in arrears.


    • Today's Take Private Offer VERY small compared to the other liabilities.


    Common Equity Purchase Price

    This is the cash price paid directly to the holders of the common stock SOHO for their shares.
    • Common Stock Price: $2.25 per share

    • Total Equity Purchase Price (Common Stock): $46.1 million

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