IRVING, TX—Select-service hotel operator La Quinta Holdings, taken private in a $3.4-billion acquisition eight years ago, said in an SEC filing Thursday that it expects to raise as much as $780 million from an initial public offering. It will be the Blackstone Group‘s third hotel IPO in six months.
La Quinta plans to sell 37.2 million shares at $18 to $21 per share, with an option for the underwriters to acquire up to 5.58 million additional shares. The company will have an equity valuation of $2.57 billion at the top of the IPO’s expected price range, according to Reuters, which reported that La Quinta is expected to price the offering on April 8.
After the IPO is completed, Blackstone affiliates will continue to hold a majority stake in La Quinta. The company expects to trade on the New York Stock Exchange under the LQ symbol.
In its SEC filing, La Quinta says it’s rated by STR as the fastest growing principal select-service hotel brand in the US primarily serving the midscale and upper-midscale segments. Since its January 2006 acquisition by Blackstone, La Quinta has expanded its franchise system by approximately three times, growing from 158 franchised hotels to 477, with an additional 187 hotels in the pipeline as of Dec. 31, 2013. It operates and franchises more than 830 lodging properties across the US, Canada and Mexico.
The timing appears advantageous for a hotel IPO. Bloomberg reported Thursday that Hilton Worldwide stock has gone up 12% since its IPO in December, while that of Extended Stay, also a Blackstone holding, has increased 17% since it went public this past November. The Bloomberg US Lodging Index has increased 43% in the past 12 months, compared to the 21% total returns for the S&P 500.