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Blackstone to Buy Wyndham Hotels

June 15, 2005|From Reuters

NEW YORK — Private equity firm Blackstone Group has agreed to buy hotel owner and franchiser Wyndham International Inc. for $1.44 billion in cash, Wyndham said Tuesday.

With the assumption of about $1.8 billion in debt, Wyndham valued the deal at $3.24 billion.

Blackstone, which has bought three lodging chains this year, will pay $1.15 per common share, an 18.6% premium to Wyndham's closing price Monday. Holders of Wyndham's preferred stock will receive $72.17 per share in cash.

Shares of Wyndham rose 15 cents, or 16%, to $1.12.

The hotel company, based in Dallas, has sold about 185 properties for $2.7 billion in recent years as it sought to cut debt, refinance and simplify its corporate structure.

Wyndham, which owns and runs upscale hotels in North America, the Caribbean and Europe, also had been entertaining interest from other bidders including La Quinta Corp. and Cendant Corp.

Lou Plasencia, president and chief executive at consulting firm Plasencia Group, said if Blackstone were to sell the Wyndham brand -- and many analysts expect that it will -- it was possible larger rivals such as Starwood Hotels & Resorts Worldwide, Marriott International and Cendant would look into buying it.

Blackstone earlier this year sold the AmeriSuites chain to Hyatt Corp. after buying it as part of an acquisition of Prime Hospitality Corp. in 2004.

The Wyndham deal is the latest in a series of mergers and acquisitions in the hotel industry over the last year.

The hotel industry is generally seen as being at the beginning of a recovery cycle after a substantial downturn in 2001-03.

Deals in the last year include CNL Hospitality Properties' acquisition of KSL Recreation Corp. and Blackstone's takeover of Extended Stay America, Prime Hospitality and Boca Resorts.

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