Blackstone Group and Starwood Capital Group on Monday agreed to buy hotel operator Extended Stay America for $6 billion, the companies said.
As bookings plunged across the U.S. hotel industry over the last year due to the COVID-19 pandemic, Extended Stay, which specializes in economy temporary housing for healthcare professionals, proved stronger than its peers.
Private equity company Blackstone’s and investment firm Starwood’s cash offer of $19.50 per share represents a premium of 15.1% to Extended Stay’s share closing price on Friday.
Shares of Extended Stay, which owns and operates 650 hotels in the United States, rose more than 17% before the opening bell.
“Extended Stay has demonstrated resilience over the past year despite persistent challenges due to government lockdowns and travel restrictions,” said Barry Sternlicht, chief executive officer of Starwood Capital.
“We are excited about the company’s growth opportunity as restrictions ease.”
Extended Stay’s stock has more than doubled in the past 12 months, outperforming its larger peers Marriott and Hilton which gained between 60% and 65%.
The deal was first reported by the Wall Street Journal.
Source: Reuters.com