NEW YORK (TheStreet) -- Strategic Hotels & Resorts (BEE) stock is sliding on Wednesday after the company priced its public offering of 36 million shares of common stock at $10.50 a share. Additionally, underwriters have been granted a 30-day option to purchase up to an additional 5.4 million shares.
The hospitality real estate investment trust said it estimates net proceeds of around $362.4 million (or $416.8 million if the underwriters exercise their over-allotment option). Proceeds will be used to fund the acquisition of a 63.6% ownership interest in the Hotel del Coronado, redeem all outstanding shares of its 8.25% Series C Cumulative Redeemable Preferred Stock, and for other general corporate purposes.
The offering is expected to close June 2, subject to customary closing conditions.
By midmorning, shares had tumbled 5.1% to $10.54.
TheStreet Ratings team rates STRATEGIC HOTELS & RESORTS as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate STRATEGIC HOTELS & RESORTS (BEE) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow."