This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Blackstone's La Quinta Checks Into Public Markets

NEW YORK (The Deal) -- Hotel chain operator La Quinta Holdings (LQ), backed by the Blackstone Group, priced its initial public offering shares at $17 each late Tuesday.

The pricing fell below the initial $18 to $21 per share it anticipated in March in regulatory filings, putting an equity value on the chain of up to $2.5 billion. At $17 per share, La Quinta will have a market value of around $2.1 billion.

The chain is going to sell 38.25 million shares, raising about $618 million after underwriter discounts and commissions. The company is going to use the proceeds to pay down about $2.7 billion in long-term debt.

Its stock opened Wednesday below pricing at $16.75 per share on the New York Stock Exchange.


WATCH: More market videos from TheStreet TV

The underwriters hold a 30-day overallotment option to buy up to an additional 5.7 million shares. Blackstone is going to own a 64% stake in La Quinta after the offering is completed, assuming the underwriters exercise their option.

Irving, Texas-based La Quinta operates 834 hotels, most of them franchised, that hold more than 84,000 rooms across North America, Mexico, Colombia and Honduras.

In 2013, La Quinta generated an adjusted Ebitda of $326.8 million on $873.9 million in revenue compared to an adjusted Ebitda of $297.8 million on $818 million in revenue for 2012.

Blackstone acquired La Quinta in 2006 for $3.4 billion in cash and debt.

The private equity firm has had a field day with hotel properties as the travel industry, especially for bread-and-butter business travelers, revived during the recovery. Last year, Blackstone took both Extended Stay America Inc. and Hilton Worldwide Holdings Inc. public.

JPMorgan Chase & Co., Morgan Stanley, Bank of America Merrill Lynch, Citigroup Inc., Credit Suisse Group, Deutsche Bank Securities Inc., Goldman, Sachs & Co. and Wells Fargo Securities LLC are joint bookrunners on the offering.

La Quinta said it expects to complete the offering by April 14.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG
BX $42.55 1.94%
LQ $24.33 -0.12%
AAPL $128.70 -0.19%
FB $78.81 -0.23%
GOOG $540.78 0.54%

Markets

DOW 18,070.40 +46.34 0.26%
S&P 500 2,114.49 +6.20 0.29%
NASDAQ 5,016.9290 +11.5380 0.23%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs