By Patrick Danner, The Miami Herald
Knight Ridder/Tribune Business News
Mar. 6--Extended Stay America, a chain of 475 low-priced hotels co-founded and chaired by Fort Lauderdale billionaire H. Wayne Huizenga, has agreed to be acquired by affiliates of The Blackstone Group in a transaction valued at $3.1 billion.
Huizenga, the largest shareholder of the Spartanburg, S.C.-based company, stands to earn almost $185 million, before taxes, from the deal. He founded Extended Stay with Chief Executive George D. Johnson Jr. in Fort Lauderdale in 1995.
Blackstone, a New York buyout firm that has raised $14 billion, said it plans to pay Extended Stay stockholders $19.625 a share -- a 24 percent premium to Friday's closing price of $15.81 a share.
Blackstone, which already owns Homestead Studio Suites, a chain of 132 extended-stay hotels, said that it would take over management of Extended Stay but that it had no plan to rebrand it.
The deal will mark the third time in 18 months that Huizenga has alighted from the top post at a public company. In late 2002, he retired as chairman of the giant car retailer AutoNation and the trash hauler Republic Services.
Ron Castell, spokesman for Huizenga, couldn't be reached for comment.
The deal, approved by Extended Stay's board on Friday, still requires shareholder approval.
Extended Stay's brands include Extended StayAmerica, StudioPlus and Crossland. The chain operates in 42 states.
Extended Stay employed 200 people in downtown Fort Lauderdale before it pulled up stakes and moved to Spartanburg in 2001. Johnson and most of Extended Stay's top executives at the time had ties to the South Carolina area.
Johnson was once the largest franchisee of Blockbuster Entertainment, the video-rental chain that Huizenga built into a powerhouse.
Huizenga held 9.42 million shares, or 9.7 percent of the outstanding shares, as of a March 2003 proxy statement.
Blackstone operates buyout, hedge and real estate funds. Its other hotel holding includes the luxury chain Savoy Hotel Plc.
"This transaction," said Stephen Schwarzman, Blackstone's president and chief executive, in a statement, "will benefit from our long track record and existing expertise in the hotel sector."
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