Blackstone leaning toward La Quinta IPO: Report

Blackstone Group plans to file for an IPO for its La Quinta Inns & Suites chain rather than sell the company on the private market, according to a Bloomberg report citing people with knowledge of the firm’s thinking.

Blackstone started receiving initial bids last month for La Quinta, but sources said Blackstone thinks it can get higher returns through an IPO. A 20% increase in Extended Stay America, co-owned by Blackstone, since its November 12 share sale helped sway the decision, sources said.

La Quinta, valued at about US$4.5 billion, would be Blackstone’s third lodging IPO. It may file for the stock offering before the end of the year, sources said.

Wyndham Hotel Group and Choice Hotels International were among the companies that had expressed interest in buying La Quinta, as had private-equity firms, people familiar with the auction process have said. It couldn’t be determined whether they had submitted offers.