Strategic Hotels & Resorts Inc. (BEE), a real estate investment trust with stakes in luxury hotels, jumped the most in more than two years, after Chief Executive Officer Laurence Geller announced his resignation.
The Chicago-based company climbed 13 percent to $6.31 at the close of New York trading. It was the biggest increase since March 24, 2010.
Geller, 64, announced his resignation as CEO, president and a member of the Strategic board on Nov. 2 after the close of regular U.S. trading. Geller, the author of two novels, is leaving Strategic to “focus on my myriad other activities and the next chapter in my life,” he said in a statement. Chairman Raymond L. “Rip” Gellein Jr. will replace him in the CEO post.
“Geller was hardly perfect as CEO, and the company’s aggressive, debt-fueled, high multiple acquisition binge prior to the unprecedented 2008-2009 industry downturn pushed the company to the very edge of survivability,” William Crow, a Raymond James & Associates Inc. analyst, said in a research note. “Today, the company is well-financed and that same portfolio -- plus a few more recent additions -- has generated some of the best top- and bottom-line growth in the industry.”
Crow has an outperform rating on Strategic shares, the equivalent of a buy.
William Marks, an analyst at JMP Securities LLC, raised his rating on the REIT to market outperform from market perform and set a 12-month price target of $7, “given the CEO’s departure as well as a declining valuation,” he said in a research note.
Strategic holds stakes in luxury hotels such as the Four Seasons Jackson Hole in Wyoming and Four Seasons Silicon Valley in California. In September, Strategic bought Essex House, an 80-year-old hotel on Central Park South in Manhattan, for $362.3 million. Strategic formed a partnership with KSL Capital Partners LLC to fund the acquisition.
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