-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Jh/CgXx6CQ1/XPB7VNpVgaJsQuYLMPc9H10XfcbKb2wAbBLdrs/MeAbatpQbZirN BavwBeimk1ZfADo8hyQfaA== 0000950123-07-015741.txt : 20071119 0000950123-07-015741.hdr.sgml : 20071119 20071119135453 ACCESSION NUMBER: 0000950123-07-015741 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20071119 DATE AS OF CHANGE: 20071119 GROUP MEMBERS: EPHRAIM FIELDS SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SUPERTEL HOSPITALITY INC CENTRAL INDEX KEY: 0000929545 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 521889548 STATE OF INCORPORATION: VA FISCAL YEAR END: 1207 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-47793 FILM NUMBER: 071255728 BUSINESS ADDRESS: STREET 1: 309 NORTH FIFTH STREET CITY: NORFOLK STATE: NE ZIP: 68701 BUSINESS PHONE: 4023712520 MAIL ADDRESS: STREET 1: 309 NORTH FIFTH STREET CITY: NORFOLK STATE: NE ZIP: 68701 FORMER COMPANY: FORMER CONFORMED NAME: HUMPHREY HOSPITALITY TRUST INC DATE OF NAME CHANGE: 19940906 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Clarus Capital Group Management LP CENTRAL INDEX KEY: 0001388315 IRS NUMBER: 208098367 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 237 PARK AVENUE STREET 2: SUITE 900 CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 212 808 7330 MAIL ADDRESS: STREET 1: 237 PARK AVENUE STREET 2: SUITE 900 CITY: NEW YORK STATE: NY ZIP: 10017 SC 13D 1 y42923sc13d.txt ORIGINAL FILING ON SCHEDULE 13D UNITED STATES SECURITIES & EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 Supertel Hospitality, Inc. ---------------------------------- (Name of Issuer) Common Stock, No Par Value --------------------------------------- (Title of Class of Securities) 868526104 --------- (CUSIP Number) Ephraim Fields, Managing Member Clarus Capital Group Management LP 237 Park Ave., Suite 900 New York, NY 10017 (212)-808-7330 -------------- (Name, address and Telephone Number of Person Authorized to Receive Notices and Communications) November 19, 2007 ------------------ (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remained of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D CUSIP NO. 868526104 Page 2 of 7 Pages - ------------------------------------------------------------------------------ 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) CLARUS CAPITAL GROUP MANAGEMENT LP 20-8098367 - ------------------------------------------------------------------------------ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - ------------------------------------------------------------------------------ 3 SEC USE ONLY - ------------------------------------------------------------------------------ 4 SOURCE OF FUNDS WC - ------------------------------------------------------------------------------ 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - ------------------------------------------------------------------------------ 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE - ------------------------------------------------------------------------------ 7 SOLE VOTING POWER 1,051,848 NUMBER OF ------------------------------------------------------------- 8 SHARED VOTING POWER SHARES BENEFICIALLY ------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER OWNED BY 1,051,848 EACH ------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER REPORTING PERSON WITH - ------------------------------------------------------------------------------ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,051,848 - ------------------------------------------------------------------------------ 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------------------------------ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.1% - ------------------------------------------------------------------------------ 14 TYPE OF REPORTING PERSON IA, PN - ----------------------------------------------------------------------
SCHEDULE 13D CUSIP NO. 868526104 Page 3 of 8 Pages - ------------------------------------------------------------------------------ 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY) EPHRAIM FIELDS - ---------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - ------------------------------------------------------------------------------ 3 SEC USE ONLY - ------------------------------------------------------------------------------ 4 SOURCE OF FUNDS WC - ------------------------------------------------------------------------------ 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - ------------------------------------------------------------------------------ 6 CITIZENSHIP OR PLACE OF ORGANIZATION UNITED STATES - ------------------------------------------------------------------------------ 7 SOLE VOTING POWER 1,051,848 (1) NUMBER OF ------------------------------------------------------------- 8 SHARED VOTING POWER SHARES BENEFICIALLY ------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER OWNED BY 1,051,848 (1) EACH ------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER REPORTING PERSON WITH - ------------------------------------------------------------------------------ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,051,848 (1) - ------------------------------------------------------------------------------ 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------------------------------ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.1% - ------------------------------------------------------------------------------ 14 TYPE OF REPORTING PERSON IN - ------------------------------------------------------------------------------
(1) The general partner to Clarus Capital Group Management LP is Clarus Capital Management, LLC. Ephraim Fields is the managing member of Clarus Capital Management, LLC and as such controls Clarus Capital Group Management LP. As such, Mr. Fields may be deemed to have beneficial ownership of the 1,051,848 shares of Common Stock held by the clients of Clarus Capital Group Management LP. ITEM 1. SECURITY AND ISSUER This statement on Schedule 13D ("Statement") relates to the common stock, no par value ("Common Stock"), of Supertel Hospitality, Inc., a Nebraska corporation (the "Issuer"). The principal executive offices of the Issuer are located at 309 N. 5th Street, Norfolk, Nebraska 68701. ITEM 2. IDENTITY AND BACKGROUND (a) - (c) AND (f). This Statement is filed by Clarus Capital Group Management LP, a Delaware limited partnership ("Clarus") and Ephraim Fields (together, the "Reporting Persons"). Clarus is a private investment management firm which invests in publicly traded U.S. equity securities. The general partner to Clarus Capital Group Management LP is Clarus Capital Management, LLC. Ephraim Fields is the managing member of Clarus Capital Management, LLC and as such controls Clarus Capital Group Management LP. Mr. Fields is engaged principally in the business of serving as the sole managing member of Clarus and an affiliate, Clarus Capital Advisors, LLC. Mr. Fields is a citizen of the United States of America. The principal business address of each of the Reporting Persons is 237 Park Ave., Suite 900, New York, NY 10017. (d) - (e). None of the Reporting Persons during the last five years has been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors) or was party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which any such person was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION The aggregate purchase price of the 1,051,848 shares of Common Stock owned by the Reporting Persons is approximately $6,400,782 including brokerage commissions. The shares of Common Stock owned by the Reporting Persons were acquired with the working capital of Clarus. ITEM 4. PURPOSE OF TRANSACTION The Reporting Persons purchased the shares of Common Stock based on the Reporting Persons' belief that the shares of Common Stock are undervalued and represented an attractive investment opportunity. Clarus reserves the right, consistent with applicable law, to acquire or dispose of additional securities of the Issuer (whether through open market purchases, block trades, private acquisitions, tender or exchange offers or otherwise). Clarus intends to review its investment in the Issuer on a continuing basis and may engage in discussions with management or the Board of Directors of the Issuer concerning the business, operations and future plans of the Issuer. Depending on various factors, including, without limitation, the Issuer's financial position and investment strategy, the price levels of the Common Stock, conditions in the securities markets and general economic and industry conditions, Clarus may in the future take such actions with respect to its investment in the Issuer as it deems appropriate including, without limitation, seeking Board representation, making proposals to the Issuer concerning the capitalization and operations of the Issuer, engaging in short selling of or any hedging or similar transaction with respect to the Common Stock, or changing its intention partially or entirely with respect to any and all matters referred to in Item 4. On November 19, 2007, Clarus sent a letter to the Board of Directors of the Issuer which set forth Clarus' belief that the Issuer's Common Stock is undervalued and demanded that the Board of Directors hire a prominent investment bank to explore strategic alternatives for enhancing shareholder value, including the outright sale of the company. Clarus noted that while it is supportive of the company's acquisition strategy, Clarus is concerned that the Issuer's senior management (including its 73 year old CEO and 62 year old CFO) are distracted by personal, health and other issues which are preventing them from acting in the best interests of shareholders. Clarus believes that because of the Issuer's tiny market capitalization, the Issuer will have difficulty achieving an appropriate valuation in the public market and that shareholders would be best served through the sale of the company. Clarus believes a more sophisticated and motivated management team could create significant shareholder value from the Issuer's assets by (1) expanding the highly accretive acquisition program; (2) monetizing the Issuer's extensive real estate holdings, much of which is worth significantly more than its current book value; (3) reducing or eliminating the Issuer's relatively high public company costs; and (4) lowering the Issuer's overall cost of capital. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. The percentages set forth in this Item 5 are based on the Form 10-Q filed by the Issuer on November 9, 2007, which stated that as of October 31, 2007, there were 20,563,426 shares of Common Stock outstanding. (a) As of the close of business on November 16, 2007, the Reporting Persons directly own 1,051,848 shares of Common Stock representing approximately 5.1% of the outstanding Common Stock. As of November 16, 2007, the date requiring the filing of this Schedule 13D, the Reporting Persons directly owned 1,051,848 shares of Common Stock representing approximately 5.1% of the outstanding Common Stock. (b) The Reporting Persons have the sole power to vote and dispose of 1,051,848 shares of Common Stock and shared power to vote and dispose of 1,051,848 of Common Stock. Mr. Fields is the sole managing principal and indirectly the 100% owner of Clarus. (c) See Appendix A for a list of transactions occurring in the last sixty days. (d) Not applicable. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Other than as described in Item 4 herein, there are no contracts, arrangements, understandings or relationships among the Reporting Persons, or between the Reporting Persons and any other person, with respect to the securities of the Issuer. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Exhibit A: Letter to the Issuer, dated as of November 19, 2007 SIGNATURES ---------- After reasonable inquiry and to the best of its knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: November 19, 2007 CLARUS CAPITAL GROUP MANAGEMENT LP By: /s/ Ephraim Fields -------------------- Name: Ephraim Fields Title: Managing Member EPHRAIM FIELDS By: /s/ Ephraim Fields -------------------- APPENDIX A
Transaction Date Number of Shares Sold Average Price - ----------------- --------------------- -------------- 10/15/07 13600 7.5551 10/16/07 3898 7.5035 10/17/07 10285 7.4987 10/18/07 400 7.4824 10/19/07 1785 7.4849 10/26/07 2400 7.4678 10/29/07 300 7.4132 10/30/07 1700 7.4535 10/31/07 1566 7.3871 11/07/07 9400 7.3135 11/08/07 27800 7.0999 11/09/07 35961 6.6179 11/13/07 9700 6.4605
EX-99.A 2 y42923exv99wa.htm EX-99.A: LETTER TO THE ISSUER EX-99.A
 

EXHIBIT A
November 19, 2007
Board of Directors
Supertel Hospitality, Inc.
309 N. 5th Street
Norfolk, NE 68701
To the Board of Directors:
Clarus Capital Group Management LP beneficially owns approximately 5.1% of the outstanding common shares of Supertel Hospitality, Inc. (“SPPR” or the “Company”) and we believe we are the Company’s second largest shareholder. We have been investors in the Company for over two years and have been patiently supportive of management’s acquisition strategy. While we continue to believe this strategy is sound, we have grave concerns about the ability of the current management team to execute this strategy. The business of indentifying, financing and integrating acquisitions is complicated and time consuming and we are concerned that SPPR’s senior management (including its 73 year old CEO and its 62 year old CFO) are distracted by personal, health and other issues which are preventing them from fully acting in the best interest of all shareholders. Furthermore, we question why SPPR remains publicly traded. SPPR is one of the smallest publicly traded REITS (and thus incurs disproportionately high public company costs) and management makes very little effort to communicate with the investment community (management does not conduct earnings conference calls and it rarely attends investor conferences or meets with investors).
We believe a more sophisticated and motivated management team could create significant shareholder value from SPPR’s assets through:
  1)   Expanding the highly accretive acquisition program to capitalize on the operating leverage inherent in such a strategy;
 
  2)   Monetizing the company’s extensive real estate holdings. SPPR has significant real estate holding, much of which was purchased over 20 years ago and is worth significantly more than its current book value;
 
  3)   Reducing or eliminating the relatively high public company costs; and
 
  4)   Lowering the company’s overall cost of capital, in part by utilizing a more appropriate amount of debt and by utilizing
lower cost debt.
We believe SPPR’s stock is dramatically undervalued. It trades at less than 7x 2008E FFO, pays an 8% dividend, has a healthy balance sheet and significantly undervalued real estate. In the past, we have suggested to you (in private communications) that because of its tiny market capitalization SPPR would have difficulty achieving an appropriate valuation in the public market and that shareholders would be best served through a sale of the company. Since you have elected not to accept our advice (and your stock price has continued to decline), we are now publicly demanding that you hire a prominent investment bank to explore strategic alternatives for enhancing shareholder value, including the

 

 

sale of the company. We have studied SPPR and its industry in detail and believe SPPR’s shareholders would be best served through the outright sale of the company. Furthermore, we believe there are strategic and financial buyers who would be interested in acquiring the company if they were given the opportunity to do so.
We are the company’s second largest shareholder so it should be apparent that we have nothing but SPPR’s shareholders’ best interests in mind. As board directors you have a fiduciary responsibility to act in the best interests of all SPPR’s shareholders and we expect you to aggressively and proactively act in order to maximize shareholder value.
Sincerely,
Ephraim Fields

 

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