Josh Arnold
Long/short equity

Red Lion Hotels' Balance Sheet Could Provide Significant Upside


Red Lion Hotels (NYSE:RLH) is an owner, operator and franchisor of midscale hotels in the western US. The company currently has roughly 12,000 rooms in its 52 hotels in operation or being developed with the mix of franchisee-owned properties and company-owned properties split about evenly. In 2008 RLH received a bid to purchase the company at $9.50 per share and last year, the company put itself up for sale again but received no bids. There have been some contentious, public shareholder fights about the future of the company but my research indicates that the larger shareholders, particularly Columbia Pacific, which owns 28% of the company's shares, are ready for a sale to happen.

Given this wrinkle in...

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