US private equity firms Blackstone and Centerbridge Partners are to acquire distressed hotel chain Extended Stay Hotels for $3.9bn, alongside US hedge fund Paulson & Co.
The US hotel group emerged from bankruptcy last week as a result of the deal, which sees the three firms acquire 100 per cent of the company.
Extended Stay reportedly filed for Chapter 11 in June last year, with over $7bn as a result of the company’s 2007 leveraged buy-out by the Lightstone Group, and falling occupancy rates as a result of the financial crisis.
A spokesman for the investor consortium said, “We are enthusiastic about the opportunity to invest in Extended Stay, which has maintained market leadership throughout the challenges of the past two years.
“After reducing its debt burden by nearly $5bn, Extended Stay will have the flexibility to improve its customer experience and offerings,” he added.
The reorganisation sees former Global Hyatt Corporation president Doug Geoga become non-executive chairman of Extended Stay’s board of directors.
Copyright © 2010 AltAssets