Blackstone Group has agreed to acquire Strategic Hotels
& Resorts for $3.52 billion, as the private-equity firm adds to its
large hospitality portfolio.
Strategic owns 17 luxury hotels totaling more than 7,900
rooms. The portfolio includes five Four Seasons, two Ritz-Carlton, two Fairmont
and two InterContinental hotels, plus the JW Marriott Essex House in New York
and the Hotel del Coronado near San Diego.
Blackstone and Strategic said Tuesday that Blackstone will
pay $14.25 a share for Strategic’s 275 million outstanding shares. The price is
4.8% more than Strategic’s closing price Friday (markets were closed Monday
because of Labor Day) and 13% more than the share price prior to a July 23
media report on a potential buyout.
Blackstone took Hilton Worldwide private in 2007 for about
$26 billion, then took the hotel giant public in December 2013 in a $2.35
billion initial public offering. Hilton last year cut its Hilton stake by 10
percentage points to 66% in a secondary offering that raised about $2.03
billion.
Also, Blackstone last year acquired the 2,995-room
Cosmopolitan of Las Vegas from Deutsche Bank for $1.73 billion.
It acquired the 1,100-unit Motel 6 chain from Accor in 2012
for $1.9 billion, and last year raised $650.3 million taking La Quinta Holdings
public.
Blackstone, along with Centerbridge Partners and Paulson
& Co., raised $565 million taking Extended Stay America public in 2013,
three years after buying the company for about $3.9 billion. Last year, the
three private equity companies kept the proceeds from a secondary offering for
Extended Stay America of 21 million shares at $21.75 per share.