La Quinta, based in Irving, Texas, plans to sell 37.2 million shares for $18 to $21 each, according to a filing today with the Securities and Exchange Commission. At the high end of the range, the company would have a market value of $2.57 billion, based on 122.6 million shares that will be outstanding.
La Quinta is poised to be the third lodging company Blackstone has taken public in the past five months as it seeks to take advantage of a recovery in real estate values. The firm’s Hilton Worldwide Holdings Inc. and Extended Stay America Inc., co-owned with Centerbridge Partners LP and Paulson & Co., have both jumped since their trading debuts.
Blackstone acquired La Quinta in January 2006 for about $3 billion. The New York-based buyout firm explored a sale of the company before opting instead for an initial public offering, people with knowledge of the matter said in November.
With today’s proposed terms, La Quinta would be floating about 30 percent of its shares in the IPO, data compiled by Bloomberg show. Blackstone will beneficially own about 66.7 percent of the common stock, according to the filing.
JPMorgan Chase & Co. and Morgan Stanley are managing the offering. La Quinta is expected to price its shares on April 8, according to Bloomberg data.
La Quinta operates and franchises more than 800 hotels in the U.S., Canada and Mexico, according to its website. Proceeds from the IPO will be used to repay debt, the prospectus shows.
The Bloomberg U.S. Lodging Index increased 43 percent, including dividends, in the 12 months through yesterday. That’s more than twice the 21 percent total return for the Standard & Poor’s 500 Index. Hilton, the world’s biggest hotel operator, has climbed 12 percent since its Dec. 11 debut, while Extended Stay, a midpriced lodging chain, jumped 17 percent from its Nov. 12 IPO.
To contact the reporters on this story: Hui-yong Yu in Seattle at [email protected]; Leslie Picker in New York at [email protected] To contact the editors responsible for this story: Kara Wetzel at [email protected] Christine Maurus