Interstate Hotels & Resorts signed a deal to be acquired by Hotel Acquisition Company, a 50-50 joint venture between subsidiaries of the Thayer Lodging Group and Shanghai Jin Jiang International Hotels for a transaction valued at approximately $307 million.

The joint venture will pay $2.25 per share in an all-cash transaction, representing a 77-percent premium over yesterday’s closing share price of $1.27. Interstate’s board of directors unanimously approved the merger agreement and stockholders will be asked to vote on the proposed transaction at an upcoming special meeting. The sale is expected to close in the first quarter of the new year. "Our priority, as always, is to maximize shareholder value," said Thomas F. Hewitt, Interstate's chairman and chief executive officer. "This is a very compelling offer at a significant premium. The hotel industry remains in deep recession, and we believe this transaction offers the highest and best value to our shareholders."

Interstate Hotels & Resorts owns and/or has ownership stakes in 232 hospitality properties with more than 46,000 rooms in 37 states and eight countries. It wholly owns six properties and has interests in 50 others.

Fred Malek, co-chairman of Thayer Lodging Group, a private equity firm, recently told Lodging Hospitality that now was the time to buy. “If you buy right, and not just cheap, and you buy in the right markets, you’ll do well in the coming years,” he said during a fall interview just before his firm closed on its fifth private equity fund, worth $300 million.

Jin Jiang Hotels is one of the leading hotel operators and managers in China, including its own Jin Jiang Inn budget brand. As of June, it operated and was developing 493 hotels. "Interstate has a global reputation as a world-class, independent hotel operator,” said Yu Minliang, Jin Jiang Hotels' chairman. “This acquisition significantly accelerates our ability to expand internationally, giving us immediate access to a worldwide platform. We also expect to mutually benefit from our global relationships in the hospitality industry, making both Jin Jiang and Interstate stronger.”

The transaction comes just two days after a Jones Lang LaSalle Hotels forecast called for global hotel transaction volume to increase by 20 to 40 percent in 2010; worldwide transaction volume is projected to increase to $11 to $13 billion in 2010, up from $9 billion this year.