(Bloomberg) -- LaSalle Hotel Properties has picked Blackstone Group LP as its preferred suitor, thwarting months of efforts by Pebblebrook Hotel Trust to buy the luxury-hotel owner, most recently for more than $4 billion.

LaSalle’s board deemed a June 11 offer from Pebblebrook “substantially similar” to one it rejected before accepting Blackstone’s bid of $33.50 a share, according to people with knowledge of the matter. The people added that the board believed Pebblebrook’s offer “does not constitute, and could not reasonably be expected to lead to, a superior proposal” to Blackstone’s.

Pebblebrook’s offer remains mainly stock-based. Because the value of that stock could fluctuate, and Pebblebrook has so far declined to include a price-protection mechanism, such as a collar, the bid exposes LaSalle shareholders to a kind of uncertainty that Blackstone’s all-cash offer eliminates, said the people, who declined to be named because the information is private.

To close, the Blackstone deal now needs approval from two-thirds of LaSalle’s shareholders. Pebblebrook could also raise its offer yet again.

Pebblebrook’s revised proposal was similar to one it disclosed last month. The fresh bid still called for a fixed exchange ratio of 0.92 Pebblebrook shares for each LaSalle share. But it locked in a cash value of $37.80, based on its five-day volume-weighted average price through June 8, that investors could opt to receive, capped at 20 percent of the deal’s value. Previously, that amount was $35.03. The revised offer also took into account the $112 million termination fee LaSalle would have had to pay Blackstone.

The prospect of a Pebblebrook deal has helped LaSalle’s stock stay consistently above Blackstone’s $33.50-a-share offer since that deal was announced on May 21. HG Vora Capital Management LLC, LaSalle’s third-largest shareholder, with a 9.1 percent stake, said last week that it viewed Pebblebrook’s offer as superior.

A deal between the two hotel companies, both based in Bethesda, Maryland, would have combined LaSalle’s 41 hotels -- including Gild Hall and the Roger in New York, L’Auberge Del Mar in California and the Marker San Francisco -- with Pebblebrook’s 28 properties.

To contact the reporter on this story: Gillian Tan in New York at gtan129@bloomberg.net

To contact the editors responsible for this story: Daniel Taub at dtaub@bloomberg.net, Peter Jeffrey, Kevin Miller

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