Extended Stay America Files Investor Presentation in Support of Transaction with Blackstone and Starwood Capital
The presentation emphasizes the fact that the
- Unique extended stay model drove resilience during pandemic and significant sector outperformance
- Pre-announcement stock price at multi-year high already factoring in post-pandemic recovery and recent strategic initiatives, providing attractive baseline price for sale transaction
- 50%+ premium to pre pandemic share price provides immediate and compelling value to shareholders; an implied premium that has only expanded since the transaction announcement, with lodging stocks selling off 9%
- Implied transaction multiple of 15.6x trailing 2020 EBITDA, 13.0x forward 2021E EBITDA and 11.0x pro-forma 2019 EBITDA, compared to STAY’s one-year pre-COVID average multiple of 9.1x EBITDA
- Boards fully committed to maximizing shareholder value having explored numerous alternatives over multiple years, including OpCo / PropCo and a whole company sale
- Thorough market review over several years produced only
Blackstoneand Starwood as interested buyers, with no other buyers emerging since announcement
- Rigorous negotiations over 2 months resulting in 5 price bumps, overseen by fully engaged and transparent Boards of directors
- Culmination of thorough, multi-year processes to explore value-enhancing alternatives
- Supported and endorsed by Management, including the CEO,
- Superior to value implied by successful continued execution of business plan on a time and risk-adjusted basis
The presentation also highlights Tarsadia’s selective recollection of interactions with STAY, its misinformed perspective on relevant valuation benchmarks, and its value-destructive alternatives, including its ill-conceived OpCo / PropCo structure and levered share repurchases.
A copy of the full presentation can be found at: https://www.aboutstay.com/static-files/2d16fb4e-7bb1-4938-88f7-4012bee84c58.
Extended Stay shareholders are reminded that their vote is extremely important, no matter how many shares they own. Shareholders should vote “FOR” the proposal on the WHITE proxy card to approve the transaction and secure the certain, immediate and compelling value of
About the Company
Additional Information and Where to Find It
This communication may be deemed to be solicitation material in respect of the proposed acquisition of
Certain statements contained in this document constitute “forward-looking statements” within the meaning of the federal securities laws. All statements other than statements of historical facts included in this document may be forward-looking, including statements regarding, among other things, the Companies’ ability to meet their debt service obligations, future capital expenditures (including future acquisitions and hotel renovation programs), their distribution policies, their development, growth and franchise opportunities, anticipated benefits or use of proceeds from dispositions, their plans, objectives, goals, beliefs, business strategies, business conditions, results of operations, financial position and business outlook, business trends and future events, including the COVID-19 pandemic, its effects on the foregoing, government actions taken in response to the COVID-19 pandemic and actions that the Companies have taken or plan to take in response to the pandemic and such effects. When used in this document, the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “will,” “look forward to” and variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not historical facts, and are based upon the Companies’ current expectations, beliefs, estimates and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond their control. There can be no assurance that management’s expectations, beliefs, estimates and projections will be achieved, and actual results may differ materially from what is expressed in or indicated by the forward-looking statements.
There are a number of risks, uncertainties and other important factors, many of which are beyond the Companies’ control, that could cause their actual results to differ materially from the forward-looking statements contained in this communication. The potential risks and uncertainties include, among others, the possibility that
Source: Extended Stay America, Inc.