Blackstone Group and Starwood Capital Group have agreed to buy hotel operator Extended Stay America for $6 billion, the companies have said.
As bookings plunged across the US hotel industry over the last year due to the COVID-19 pandemic, Extended Stay, which specialises 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 March 12.
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Extended Stay owns and operates 650 hotels in the US.
"Extended Stay has demonstrated resilience over the past year despite persistent challenges due to government lockdowns and travel restrictions," Starwood Capital CEO Barry Sternlicht said. "We are excited about the company's growth opportunity as restrictions ease."
Stock Has More Than Doubled In Past Year
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.
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