Key facts
- Braemar Hotels & Resorts will terminate its management agreements with Ashford Inc.
- Braemar Hotels & Resorts will become a self-managed REIT.
- Braemar Hotels & Resorts will pay a $480 million breakup fee.
- The decision follows a failed sale process.
- Most proceeds from the failed sale would have gone to Ashford Inc.
- Conflict of interest concerns prompted the decision.
Braemar Hotels & Resorts has announced its intention to terminate its existing management agreements with Ashford Inc. and transition to a self-managed Real Estate Investment Trust (REIT). This strategic shift will necessitate a significant breakup fee of $480 million to be paid to Ashford Inc. The decision to part ways with Ashford Inc. was precipitated by a recent, unsuccessful sale process for Braemar. During this process, it became apparent that most of the potential proceeds from a sale would have been allocated to Ashford Inc., thereby raising substantial concerns regarding a conflict of interest for Braemar's shareholders. By becoming self-managed, Braemar aims to align its operational and strategic direction more directly with the interests of its own stakeholders, free from the financial entanglements and potential conflicts arising from its relationship with Ashford Inc.