Starwood makes ‘better’ offer for Extended Stay

A Starwood Capital-led consortium has reportedly made a ‘better’ offer than rival Centerbridge Partners and Paulson & Co. for the bankrupt hotel operator. Starwood’s bid was delivered Monday, the last day to submit competing bids.

A consortium of investors led by Starwood Capital Group has submitted a “better” offer than rival Centerbridge Partners and Paulson & Co. for bankrupt hotel chain Extended Stay, according to a report by Bloomberg.

A person familiar with the situation confirmed to PERE Starwood had made an offer Monday, the final day to submit competing offers for Extended Stay, but declined to provide financial details.

“In our view, it’s a bit better than the Centerbridge bid, and we’re hoping there will be vigorous bidding at the auction,” Jacqueline Marcus, a lawyer for Extended Stay, told Bloomberg. The auction for the bankrupt hospitality chain is reportedly scheduled for 27 May. 

The rival group of investors involves investment firm Centerbridge Partners, hedge fund Paulson & Co. and private equity real estate firm The Blackstone Group, according to an earlier report by The Wall Street Journal.

Starwood’s original $905 million recapitalisation bid for Extended Stay, which included co-financing from private equity firm TPG Capital and real estate debt investor Five Mile Capital, was backed by Extended Stay’s board in March, valuing the company, post-bankruptcy, at $3.9 billion. That offer was later matched by Centerbridge after attracting interest from Blackstone, which agreed to invest a reported $100 million for a minority stake in the company – between 10 percent and 25 percent – after it emerged from bankruptcy.

Extended Stay was originally bought by private equity real estate firm The Lightstone Group for $8 billion, and filed for bankruptcy in June 2009 with $7.1 billion in assets and $7.6 billion in debt.