Blackstone Real Estate Partners and Starwood Capital have teamed up to buy hotel chain operator Extended Stay America (ESA) for $6bn (€5bn).
ESA said it has agreed to be bought for $19.50 per paired share in the all-cash transaction by the 50:50 joint venture between funds managed by Blackstone and Starwood Capital. The acquisition includes ESA’s paired-share real estate investment trust ESH Hospitality.
The amount being offered represents a premium of 15.1% over the company’s closing stock price on Friday.
Tyler Henritze, head of US acquisitions for Blackstone Real Estate said: “Travel and leisure is one of Blackstone’s highest conviction investment themes, and we have confidence in the extended-stay model.
“We helped create this company nearly twenty years ago, and believe our expertise puts us in a unique position to add long-term value.”
Barry Sternlicht, CEO of Starwood Capital, said: “Extended Stay has demonstrated resilience over the past year despite persistent challenges due to government lockdowns and travel restrictions.
“We are excited about the company’s growth opportunity as restrictions ease and we’re confident that, in partnership with Blackstone and the company, our team has the right experience to drive continued success.”
Doug Geoga, ESA board chairman, said: “After a thorough review of the company’s business plan, the boards concluded that the immediate cash premium offered by this transaction is compelling for stockholders. We are delighted with this outcome.”
Bruce Haase, CEO and president of ESA, said, “We are pleased to announce this transaction with Blackstone and Starwood Capital, two of the most experienced investors in the hospitality space with impressive track records of building value in a wide variety of real estate assets, and we look forward to this partnership and continued growth.”
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