Certain affiliates of Centerbridge Partners LP, Paulson & Co. Inc. and Blackstone Group LP kicked off a secondary offering of 25.0 million paired shares of Extended Stay America Inc. and ESH Hospitality Inc.
Based on Extended Stay's May 30 closing stock price of $17.60 per share, the gross offering proceeds would total $440.0 million. Each paired share comprises one Extended Stay common share and one ESH Hospitality class B common share.
Upon completion of the offering, and associated distributions of 500,716 paired shares by the affiliates to their respective partners, Centerbridge, Blackstone and their affiliates will no longer beneficially own any paired shares. Paulson and its affiliates will keep beneficial ownership of about 1.8 million paired shares.
Extended Stay and its unit, which will not receive any proceeds from the offering, agreed to repurchase 583,530 paired shares directly from the selling stockholders in a private, nonunderwritten transaction at a per-share price equal to that paid by the offering's underwriters.
The company and its unit plan to use cash on hand to fund the share repurchase, which is slated to close concurrently with the offering.
Citigroup and Morgan Stanley will be the offering's underwriters.