La Quinta chairman and CEO Francis W. Cash added that "Blackstone has indicated" that it want to grow the firm's two brands--La Quinta and Baymont Inns & Suites--and may covert some northeast properties to La Quintas. A Blackstone Group spokesperson tells GlobeSt.com that the firm cannot comment on the deal at this time.
Cash said he expects the company, which will transition from a publicly held company to a privately held one, to be headquartered in Dallas with the same management team. "We'll have a broader platform and hope to accelerate occupancy rates." He added that Blackstone intends to invest $100 million over the next three years to upgrade the properties.
Of the $3.4 billion, approximately $2.3 billion is equity that will be paid to shareholders and $800 million is in assumed debt and costs related to the transaction. A shareholders' vote has yet to be set on a proposal for $11.25 per share in cash. Cash said additional details will be released when a proxy statement is filed a few weeks from now.
In August, Blackstone acquired another Dallas firm, Wyndham International Inc., $3.24 billion. The company subsequently sold the Wyndham brand to Cendant Corp. for $100 million the following month. Cash compared the two deals saying that the Wyndham transaction was "all about real estate assets," while in this case it's about "buying brands."
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