Extended Stay America IPO could value company at up to $4.2 bln


Oct 31 (Reuters) - Hotel chain Extended Stay America Incsaid it expects to sell 28.3 million common shares at $18-$21each in an initial public offering, valuing the company at asmuch as $4.2 billion.

The offering would raise about $594 million at the higherend of the projected price range. ()

The company, headed by former Starbucks Corp ChiefExecutive James Donald, was bought for $3.9 billion at abankruptcy auction in October 2010 by a group including hedgefunds Paulson & Co and Centerbridge Partners and private equityfirm Blackstone Group LP.

Blackstone and Paulson each hold about 27.8 percent of theCharlotte, North Carolina-based company, which operates of 682hotels in the United States and Canada.

Blackstone has also filed IPO plans for U.S. hotel operatorHilton Worldwide Inc. Sources have told Reuters it is seeking avaluation of about $30 billion.

Deutsche Bank, Goldman Sachs and J.P. Morgan are leadunderwriters for the offering.

The hotel industry's revenue per available room, a measureof room rates and occupancy levels, has increased by about 6.9percent in the Americas over the past three years, according toSmith Travel Research.

Private equity firms have been trying to sell or list assetsto take advantage of a surging IPO market as a market rally andlow interest rates entice investors into stocks.

Total proceeds raised from IPOs rose to $11.80 billion inthe third quarter from $6.70 billion a year earlier.

Shares of Brixmor Property Group Inc, a shoppingcenter company owned by Blackstone Group, rose as much as 4percent in their market debut on Wednesday.

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