US - New York-based equity firm Blackstone Group has agreed to buy Texas-based hotel REIT La Quinta for $3.4bn (€2.9bn). It's the latest acquisition in the firm's 18-month shopping spree in the hotel sector.
The deal means Blackstone will pay $2.28bn cash, or $11.25 for each unit of stock (which includes one common share paired with a class-B common share of its La Quinta Properties affiliate), and will take over La Quinta's $810m in debt and $212m cash-on-hand.
La Quinta chairman and chief executive Francis Cash said that Blackstone intended to keep the chain intact and the management in place at the Irving, Texas headquarters. La Quinta includes nearly 600 owned and franchised limited-service hotels that operate under the La Quinta, Baymont Inn & Suites, Woodfield Suites and Budgetel brands.
"Blackstone has no intention of selling off the real estate,” Cash said in a conference call. "They love the brand. They love our franchising programme, and they'll probably want to accelerate.”
Cash's opinion of Blackstone's sentiments appear to be reflected in the purchase price which carried a 37% premium over La Quinta's share price when the deal was announced last week.
Blackstone intends to pump $100m into the La Quinta properties over the next three years, which should generate "a nice kick in occupancy and rates", according to Mr Cash.
Blackstone launched its hotel-buying spree in May 2004 with the $2bn acquisition of Extended Stay America. That deal was followed by the $564m purchase of Prime Hospitality and the $1bn purchase of Boca Resorts late last year.
Last summer it bought hotel owner and franchiser Wyndham International for $1.44bn, and then turned around and sold the Wyndham name and franchising business to New York leisure and real estate group Cendant.
La Quinta agreed to the deal several months after it was said to have been negotiating to acquire the Summerfields brand from Blackstone. Blackstone eventually agreed to sell Summerfields to the Hyatt group earlier this month.