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Blackwells Capital Sends Letter to the Board of Trustees of Service Properties Trust

SVC
  • Blackwells Capital LLC sent a letter to Service Properties Trust (SVC) demanding a transparent sale process after the Board rejected TKO LLC's $2.0 billion all-cash offer for the hotel portfolio on November 4, 2026.
  • The rejected offer was valued at more than twice the entire Trust's market equity of approximately $815 million, yet the Board claimed the hotels alone are worth significantly more than $2.0 billion.
  • Blackwells highlighted severe financial decline for shareholders, including an 85% drop in share price over five years, a 35% drop in one year, \& a 98% dividend cut.
  • The letter alleges significant conflicts of interest due to the Board's ties to RMR \& Sonesta, noting that the Board Chair \& CEO serve as executives at the external manager \& operator receiving $30.7 million in fees over nine months.
  • Blackwells contends that specific bylaw provisions effectively extinguish shareholder rights by making it impossible to nominate trustees, citing requirements for 1% ownership held for three years \& a 67% solicitation threshold.
  • The firm demands the Board countersign TKO's nondisclosure agreement \& engage in a competitive sale process overseen by unconflicted trustees with independent advisors.
  • Blackwells requests full disclosure of all proposals received in the past 24 months, the analysis behind the rejection, \& a written commitment that any management termination payments to RMR or Sonesta will be negotiated solely by independent trustees.
  • The letter demands the repeal of bylaw sections 2.14, 3.2, 9.2, \& 16.2, which Blackwells argues are unlawful under Maryland General Corporation Law.
  • Blackwells requires a written response to all demands by 5:00 p.m. Eastern Time on November 13, 2026.
Company
Blackwells Capital
Keywords
Blackwells Capital