A bit of a joke in my book, the offer that is. Seems rather insincere and taking the pi** at the customer for what is supposed to be a 5* property where I would expect a better offer. Either they move you to the Canopy and significantly reduce the rate (or comp one night at a minimum) or give a higher category suite or so or they can keep the rate as is and move you to the Waldorf

if that would work for you location wise.
Looking at the latest reviews of the LXR here though I'm not sure I'd want to stay so it may be a blessing in disguise and you just have to negotiated for a suite at the new Canopy or one night comped by LXR or so. This place seems on a downward spiral.
There is a review of the Canopy on Head for Points just today in case you hadn't seen it yet. YMMV.