Blackstone Group And Starwood Capital Group Raise Their Buyout Bid For Hotel Operator Extended Stay America
Extended Stay America has said that Blackstone Group and Starwood Capital Group have raised their buyout bid for the hotel operator by $1 per share, after a proxy adviser recommended shareholders vote against the $6 billion takeover offer.
Under the deal, a joint venture between funds managed by the two companies will pay Extended Stay shareholders a total of $20.50 per share, up from a previous offer of $19.50 per share in March.
"The $20.50 per paired share consideration represents the Blackstone/Starwood Capital joint venture's best and final offer," the companies said in a statement.
Reversed ISS Stance
The new bid comes a week after Institutional Shareholder Services (ISS) said the deal terms of the previous $6 billion offer did not appear to be sufficiently compelling.
However, ISS has now recommended shareholders of Extended Stay America to vote for Blackstone Group and Starwood Capital's raised takeover offer, the hotel operator has said.
ISS reversed its stance after the private equity firms increased their offer for Extended Stay by $1 per share to $20.50 per share.
"We are also pleased to note that the transaction is now supported by a number of our large shareholders who had previously expressed concerns," Extended Stay chairman Doug Geoga said in a statement.
The amended deal has been unanimously approved by the board of Extended Stay America. The deal is expected to close on June 16, the company said.
Extended Stay Information
Extended Stay specialises in economical temporary housing for healthcare professionals, and last year proved stronger than its peers even as bookings plunged across the US hotel industry due to the pandemic.
Extended Stay owns and operates 650 hotels in the US.