|By Chris Winston, Herald-Journal, Spartanburg, S.C.|
Knight Ridder/Tribune Business News
Apr. 21--A third of the employees at Extended Stay America's Spartanburg headquarters have been told they won't have jobs after The Blackstone Group purchases the company.
Corry Oakes, president of Extended Stay, said Tuesday that 82 people in the Morgan Square building have been notified their jobs will end if the $3.1 billion buyout is approved by shareholders on May 7 as expected and the deal closes May 11.
That represents about one-third of the workers at the 1-year-old corporate offices.
"We've got a wonderful team," said Oakes, who said he is focused on finishing the deal before he looks for new job opportunities. "They are very important to all of us here."
Fewer employees will be needed after the merger, Oakes said, for three major reasons: The private Blackstone Group will have fewer regulations than the public Extended Stay, the new owners will not develop new properties and grow as quickly as Extended Stay has, and more management will be done from the field instead of the home office. While some will lose their jobs effective May 11, others will be on board for at least six more months.
The affected employees were given severance packages, he said. Oakes said The Blackstone Group, a New York-based investment group, will move 15 employees to Spartanburg to run Extended Stay's three brands as well as Homestead Studio Suites, another company it owns. "They will manage all four out of Spartanburg," he said. None of the job losses will take place, Oakes said, if the merger is not approved by shareholders in a meeting at corporate headquarters at 10 a.m. May 7.
The company's major shareholders and the board have already put their support behind the deal, which has the Blackstone Group paying $19.625 for each share of Extended Stay stock.
-----To see more of the Herald-Journal, or to subscribe to the newspaper, go to http://www.GoUpstate.com
(c) 2004, Herald-Journal, Spartanburg, S.C. Distributed by Knight Ridder/Tribune Business News. ESA,