Blackstone crashes its own hotel party - Reuters

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Hotel guest Gerardo Gentile (bottom) sunbathes at the pool of the Axel Hotel in Buenos Aires November 1, 2007. Axel Hotel, Argentina's first luxury gay hotel, opened its door to paying guests on Thursday. REUTERS/Marcos Brindicci

Blackstone (BX.N) and Starwood Capital are hoping an extra tip to shareholders of Extended Stay America (STAY.O) will get their deal across the line. The private equity firms on Tuesday increased their offer for the hotel chain by $1 to $20.50 a share. The prior $6 billion deal, agreed by the company in March, came under pressure when two leading proxy advisers recommended shareholders vote read more against it at a meeting scheduled for next week.

It’s the third time Blackstone has checked into the hotel group, and Starwood is its largest shareholder with a 9% stake. The buyout firms’ inside knowledge is a reason for other shareholders to be skeptical. And although billed as a 21% premium, the latest offer only values the company at roughly 14 times its next 12 months' EBITDA, a big discount to rivals like Hilton Worldwide (HLT.N).

Shareholder Tarsadia Capital urged shareholders to reject the new offer. After first buying Extended Stay in 2004, then again in 2010, twice leaving with a suitcase full of cash, it's small wonder if Steve Schwarzman’s outfit is wearing out its welcome. (By Lauren Silva Laughlin)

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