Strategic Hotels & Resorts (NYSE:BEE) focuses on operating upscale and luxury hotels and resorts, mostly in North America and Europe. The portfolio has about 20 properties with more than 10,000 rooms, and the company is structured as a real estate investment trust or REIT. According to the company's website, "Our asset management expertise is what truly distinguishes us."
Well, an analyst for Wachovia (NYSE:WB), Jeffrey Donnelly, has published a very favorable report on Strategic Hotels. In fact, he thinks there could even be a buyout, with possible suitors like the Blackstone and Carlyle.
It certainly looks like the fundamentals of Strategic Hotels are perking up. In the fourth quarter, funds from operations and revenue increased from $9.2 million, or $0.17 per share to $20.3 million, or $0.26 per share. Sales increased from $119.7 million to $242.5 million.
And, no doubt, private equity firms have been targeting leisure properties. But this does not mean a deal will necessarily happen.
Also, Donnelly thinks a deal would be valued at $24-$26 per share. Thus, with the stock price currently at $23.51, there's not much upside left.
Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.
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