Shareholder lawsuits brought against The Blackstone Group for allegedly offering a lowball price for hotel operator Prime Hospitality have been resolved in the form of a $25 million (€17.6 million) settlement, according to a Bloomberg report.
The firm acquired New Jersey-based Prime Hospitality, which owns and operates the AmeriSuites, Wellesley Inns and Suites and Prime Hotels and Resorts brands, in 2004 for $790 million, or approximately $12.25 per share.
Shareholders of the hospitality shop filed suit in Delaware court in 2004 alleging that the company’s board of directors had accepted a lowball offer for the company.
The $25-million settlement was approved after lawyers representing the shareholders concluded that the hotel’s executives had, in fact, shopped around for the best price.
Blackstone owns other hospitality assets including the MeriStar Hospitality Corporation, LaQuinta Inns and Suites, Wyndham International, Boca Resorts and Extended Stay America.
Earlier this year, the firm acquired the Hilton Hotels Corporation for $26 billion, adding almost half a million hotel rooms to its global hospitality empire. The Hilton transaction is expected to close in the fourth quarter of 2007, subject to shareholder approval.
Blackstone’s real estate division currently has approximately $23 billion of assets under management.