Reuters: Deals: Red Lion Hotels explores possible sale, shares rise

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Red Lion Hotels explores possible sale, shares rise Mar 28th 2012, 20:42 Wed Mar 28, 2012 4:42pm EDT (Reuters) - Red Lion Hotels Corp (RLH.N) on Wednesday said it would explore strategic alternatives, including a potential sale of the company or a strategic combination with a third party, sending shares of the company up 9 percent in after-market trading. In February, Red Lion's largest shareholder - Columbia Pacific Opportunity Fund sent a letter to the Red Lion's board in February asking the directors to sell the company in its entirety or in parts. In November, Columbia Pacific, which holds a near 29 percent share in the company, said it may be a potential buyer for Red Lion. The board has authorized Bank of America Merrill Lynch to help the company with the strategic alternative. Red Lion has been selling assets to reduce debt and looking to improve its owned and leased hotels. In June last year, it sold the Red Lion Hotel in Seattle, Washington for $71 million. At December 31, 2011, the company's outstanding debt was $101.3 million, according to its regulatory filing. Shares in Red Lion were trading up at $8.80 in after market trade. They closed at $8.07 on Wednesday on the Nasdaq. (Reporting by Meenakshi Iyer and Jochelle Mendonca in Bangalore; Editing by Viraj Nair)

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