Sotherly Hotels (SOHO) investors receive $2.25 cash in merger deal
Rhea-AI Filing Summary
Sotherly Hotels Inc. completed a merger in which Sparrows Nest LLC merged into the company, making it a subsidiary of KW Kingfisher LLC. At the February 12, 2026 effective time, each share of common stock was automatically converted into the right to receive $2.25 in cash per share without interest.
As a result, Chairman and director Andrew Sims and related entities disposed of all direct and indirect common stock holdings and now report zero common shares. All outstanding restricted stock units were canceled and converted into equivalent cash rights based on the same $2.25 per share consideration. Sims continues to hold directly 1,500 shares each of the 8.0% Series B, 7.875% Series C, and 8.25% Series D cumulative redeemable perpetual preferred stock.
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Insights
Sotherly Hotels’ merger cashes out common shareholders at $2.25 per share while preferred stakes remain.
The disclosure shows Sotherly Hotels becoming a subsidiary of KW Kingfisher LLC through a merger effective February 12, 2026. Each common share converts into a fixed $2.25 cash payment, so existing common equity is effectively replaced by cash for holders, including entities associated with Chairman Andrew Sims.
All restricted stock units are canceled and settled for cash using the same $2.25 per-share value, simplifying the equity structure. Sims continues to hold 1,500 shares each of three series of cumulative redeemable perpetual preferred stock, indicating those preferred securities remain outstanding for him after the merger. Overall, the filing documents completion of the transaction and the resulting shift from common equity to cash consideration.
Insider Trade Summary
| Type | Security | Shares | Price | Value |
|---|---|---|---|---|
| Disposition | Common Stock | 826,909 | $2.25 | $1.86M |
| Disposition | Common Stock | 793,937 | $2.25 | $1.79M |
| Disposition | Common Stock | 107,490 | $2.25 | $242K |
| holding | 8.0% Series B Preferred Stock | -- | -- | -- |
| holding | 7.875% Series C Preferred Stock | -- | -- | -- |
| holding | 8.25% Series D Preferred Stock | -- | -- | -- |
Footnotes (1)
- Pursuant to the terms of that certain Agreement and Plan of Merger (the "Merger Agreement"), dated as of October 24, 2025, by and among Sotherly Hotels Inc., a Maryland corporation (the "Company"), KW Kingfisher LLC, a Delaware limited liability company ("Parent"), and Sparrows Nest LLC, a Maryland limited liability company ("Merger Sub"), at the effective time on February 12, 2026 (the "Effective Time"), Merger Sub merged with and into the Company, with the Company surviving such merger (the "Merger") as a subsidiary of Parent. In connection with the Merger, each share of Company common stock, par value $.01 per share ("Common Stock"), was automatically converted into the right to receive $2.25 in cash per share without interest (the "Merger Consideration"). The disposition of the securities by the Reporting Person in the Merger was approved by the Company's board of directors in the manner contemplated by Rule 16b-3 under the Securities Exchange Act of 1934, as amended. Pursuant to the Merger Agreement, each restricted stock unit (a "RSU") that was outstanding immediately prior to the Effective Time was canceled as of the Effective Time and converted into a right to receive a cash payment with respect to an aggregate amount, without interest, equal in value to (x) the number of shares of Common Stock subject to such RSU immediately prior to the Effective Time, multiplied by (y) the Merger Consideration. Reflects allocations under the issuer's Employee Stock Ownership Plan. Includes additional allocations as of December 31, 2025. The full security title is 8.0% Series B Cumulative Redeemable Perpetual Preferred Stock. The full security title is 7.875% Series C Cumulative Redeemable Perpetual Preferred Stock. The full security title is 8.25% Series D Cumulative Redeemable Perpetual Preferred Stock.
