ESA suitors raise their offer ahead of shareholder vote

George Sell George Sell Uploaded 01 June 2021

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US: Blackstone Real Estate Partners and Starwood Capital Group have increased their offer to purchase Extended Stay America to $20.50 per share, $1 per share more than their initial offer.

The new offer represents around a 21 per cent premium over the stock's closing value on March 12, the last trading day prior to the deal's announcement. ESA has signed an amendment to the previous definitive merger agreement accepting the new offer, ahead of a shareholder vote on June 8.

Doug Geoga, chairman of the boards of the company, said: “The STAY boards and management team are committed to acting in the best interests of the company and all of our shareholders, and appreciate the input that we have received from shareholders throughout this process. At this enhanced offer price, we are also pleased to have the support of all 11 of our directors as each and every one of us views a sale of the company for $20.50 per paired share in cash today as the best outcome possible for shareholders.”

Bruce Haase, ESA CEO and president, said: “I believe this revised offer from Blackstone and Starwood Capital reflects a uniquely compelling value proposition for our shareholders and is superior to any viable alternative for the company.”

Tyler Henritze, head of acquisitions Americas for Blackstone Real Estate, said: “We are pleased that the revised offer and merger agreement have been approved by every director of ESA and ESH’s boards. Pending shareholder approval of this best and final offer, we look forward to closing the transaction in mid-June.”

Barry Sternlicht, CEO of Starwood Capital, said: “This revised offer allows STAY shareholders to recognise significant value for their shares. We are grateful for the boards’ unanimous support and look forward to gaining that support from STAY shareholders as well.”

All members of ESA's dual boards — one for ESA and one for its paired-share real estate investment trust ESH Hospitality — unanimously approved the new offer and recommend that shareholders do so too. Previously, two board members had opposed the initial deal.

 

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