Blackstone Group and Starwood Capital’s cash bid to acquire Extended Stay America and its paired-share REIT, ESH Hospitality, has preliminarily been accepted by holders of a majority of its shares. The amended deal is worth US$20.50 per paired share.
The two PE firms in March bid US$19.50 per share, but after six major shareholders called the bid insufficient and tried to block the sale, Blackstone and Starwood Capital sweetened the deal by US$1 per share and apparently won the day.
The joint venture recently said the new offer represented their “best and final” offer and provides enhanced, immediate and certain value with a 21% premium over ESA’s closing price of US$16.95 on March 12, 2021.
Extended Stay America has 652 hotels and ESH Hospitality is the largest lodging REIT in North America by unit and room count, with 564 hotels and approximately 62,500 rooms in the U.S. ESA also franchises an additional 88 Extended Stay America hotels.
The extended-stay brand fared well through the pandemic as it played host to many traveling first responders and transient workers. Last year, when the industry suffered with 42% occupancy, ESA ran 73% at its company-owned properties.