Don't forget - sign up for our free daily newsletter to stay in the activist investing know. Sessa Capital has gone active on Ashford Hospitality Prime (NYSE: AHP) with a 7.2% stake. The big issue at hand is the potential sale of the company, where AHP is exploring strategic alternatives. Sessa wants clarity on the fees to be paid to AHP’s adviser, Ashford, Inc. in the event of a sale.
There are conflicts of interests with the external advisor structure. This includes an amendment to the advisory agreement in June that removed shareholders' ability to freely vote for directors and kept a disproportionate termination fee payable to the advisor.
As Sessa notes, "the termination fee, as currently structured, presents an overwhelming challenge to the integrity of the strategic review process. Quite simply, the current termination fee is impossible to calculate, highly variable, and potentially disproportionate, making a fair strategic process impossible."
The company has estimated the private market value at $27.60 per share.