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Starwood To Pull Extended Stay From Bankruptcy

GREENWICH, CT-Extended Stay is accepting a $905-million offer from a Starwood-led group.

By Ryan Clark | Updated on March 18, 2010

GREENWICH, CT-Extended Stay America is accepting a bid from a group including Starwood Capital Group, TPG Capital and Five Mile Capital Partners, which will supplant an earlier offer from Centerbridge Partners and Paulson & Co. to pull the hotelier out of bankruptcy. The Starwood-led bid is worth up to $905 million.

The proposal includes: $450 million equity investment and a $255 million cash option for creditors that want cash instead of equity. The group also agreed to backstop a $200 million equity rights offering. Barry Sternlicht’s Starwood is reportedly providing half of the equity, while TPG and Five Mile will provide the remainder.

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