Blackstone, Starwood up bid for Extended Stay America

Shareholders worry that company is undervalued in the deal

National /
Jun.June 02, 2021 11:01 AM
Starwood CEO Barry Sternlicht and Blackstone CEO Stephen Schwarzman (Getty)

Starwood CEO Barry Sternlicht and Blackstone CEO Stephen Schwarzman (Getty)

Blackstone Group and Starwood Capital Group are once again trying to woo Extended Stay America’s shareholders.

The two firms announced Tuesday that they would increase their offer to buy the hotel operator to $20.50 per share, Bloomberg News reported.

In March, they agreed to buy the company at $19.50 per share. But some of Extended Stay’s shareholders have voiced opposition to the deal, questioning the timing, how the sale proceeded — one group, Tarsadia Capital, says the bidding process did not allow for higher offers — and the price itself.

“A $1 bump in price is a small Band-Aid that cannot cure a fatally flawed process,” Tarsadia said in a statement to Bloomberg News. “The updated offer announced today, representing just a 5 percent increase over the previous price, is nothing more than an attempt to jam through a transaction that still significantly undervalues the company.”

Another investor, Philip Cook of SouthernSun, told the publication that his firm “believe[s] this transaction and the process undertaken by the board represents one of the more egregious examples of poor corporate governance.”

Still, analysts told the outlet that they expect the higher price will get the deal done. The amended offering from Blackstone and Starwood is a 21 percent premium over Extended Stay’s share price on the day that the original offer was made, according to the publication.

At the end of trading on Tuesday, Extended Stay’s stock price hit $19.76 for a market value of $3.5 billion.

[Bloomberg News] — Sasha Jones





    Related Articles

    arrow_forward_ios
    The grand reopening: As restrictions lift, CRE markets race toward recovery
    The grand reopening: As restrictions lift, CRE markets race toward recovery
    The grand reopening: As restrictions lift, CRE markets race toward recovery
    The commercial market was hit hard by the pandemic, and property tax revenue is expected to fall 5 percent. (iStock)
    Tax bills show how much Covid devalued NYC real estate
    Tax bills show how much Covid devalued NYC real estate
    Acting Katara CEO Andrew Humphries and 355 West 16th Street (Google Maps, AHIC)
    Katara Hospitality takes over Dream Downtown’s $125M ground lease
    Katara Hospitality takes over Dream Downtown’s $125M ground lease
    Blackstone's Kathleen McCarthy and Ken Caplan with 31-30 Hunters Point Avenue in Long Island City (Blackstone, Google Maps)
    Blackstone picks up LIC warehouses for $37.5M
    Blackstone picks up LIC warehouses for $37.5M
    About 38 percent of New York hotels with loans in commercial-mortgage backed securities were 30 days or more past due in May. (iStock)
    Hotels’ recovery taking longer in NYC than elsewhere
    Hotels’ recovery taking longer in NYC than elsewhere
    Blackstone’s Jon Gray and Skyview Mall at 40-24 College Point Blvd (Getty, Shops at Skyview)
    Blackstone lands $285M CMBS refi for Flushing’s Skyview mall
    Blackstone lands $285M CMBS refi for Flushing’s Skyview mall
    Gowanus Inn & Yard at  645-651 Union Street, Brooklyn, Sonder CEO Francis Davidson and Red Pine Principal Michael Federman (Google Maps, Sonder, Federman Steifman)
    Sonder takes lease for 76-key Gowanus Inn
    Sonder takes lease for 76-key Gowanus Inn
    Abraham Merchant of Merchants Hospitality, 11-01 43rd Avenue and Frank Brosens of Taconic (Merchants Hospitality, Getty, Savanna Rooftop)
    Merchants Hospitality sells dormant LIC hotel for $38M
    Merchants Hospitality sells dormant LIC hotel for $38M
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...