Blackstone to Acquire Meristar Hospitality

MeriStar Hospitality, Bethesda, Md., is being acquired by an affiliate of The Blackstone Group in an approximately $2.6 billion transaction.The merger consideration includes $10.45 per common share of the hotel real estate investment trust and the same amount per operating partnership unit of MeriStar's operating partnership, the REIT reports. This represents a 20% premium over MeriStar's closing stock price on November 10, 2005, according to MeriStar. The transaction, which has been approved by the MeriStar board and is expected to close in the second quarter, means that yet another REIT will be moving away from the publicly traded arena to the private equity space. Paul Whetsell, MeriStar's chairman and CEO, said that the deal "represents attractive value" to MeriStar shareholders. A proposal for MeriStar to merge with Felcor Lodging a few years ago fell through. On Feb. 21, MeriStar common shares closed at $10.28.