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Sternlicht’s group leads $905 million buyout bid
Barry Sternlicht's Starwood Capital Group has teamed up with two partners to acquire the Extended Stay Hotels Inc. chain for $905 million. The Starwood plan would allow the hotel chain to emerge from bankruptcy and give it a post-transaction value of about $3.9 billion.
In a news release, Starwood Capital said the Extended Stay board determined that Starwood's offer, made in conjunction with TPG Capital and Five Mile Capital Partners, “is superior to a previous agreement with Centerbridge Partners and Paulson & Co., which has been terminated.” The deal is still subject to final approval by the bankruptcy court handling Extended Stay's case.
“We are excited about the prospects of acquiring Extended Stay,” said Sternlicht, Starwood Capital's chairman and ceo. “We believe we have made a very compelling offer with the specific intent of balancing and considering the interests of all stakeholders involved here. Starwood Capital has unparalleled experience in the hospitality sector and we believe we are uniquely positioned to work with the team to help the company flourish and maximize the company's potential for all stakeholders.”
The Wall Street Journal noted that the Starwood/Extended Stay deal “is another sign that savvy investors are looking to swoop in on distressed commercial properties as the capital markets begin to ease for big borrowers.” The Journal noted that the last time the Extended Stay chain changed hands – in 2007 – the chain was valued at about $8 billion.
Extended Stay operates more than 680 hotels under the following brands: Extended Stay Deluxe, Extended Stay America Efficiency Studios, Homestead Studio Suites, StudioPLUS Deluxe Studios and Crossland Economy Studios.
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