Bidding for Extended Stay Assets “Robust”

NEW YORK (Reuters) – Interest in bankrupt hotel chain Extended Stay America has been high and bidding is expected to be robust, financial and legal advisers said on Monday.

Bids for the largest owner and operator of mid-priced extended-stay hotels in the United States are due on May 17 and an auction is scheduled for May 27.

“The process has been very active and quite robust,” said Saul Burian, a managing director at Houlihan Lokey, which is representing an interested group led by Centerbridge Partners.

Financial firm Lazard has already approached more than 90 parties to solicit interest in competing bids for Extended Stay, said Ari Lefkovits of Lazard Freres & Co LLC, the company’s financial adviser.

Lefkovits declined to say who has advanced in the process or to be more specific.

The Centerbridge group, which includes Blackstone (BX.N) and Paulson & Co, has been named the stalking horse bidder for Extended Stay. Its main rival so far has been Starwood Capital Group.

Goldman Sachs Group Inc (GS.N) is close to a deal to provide financing for an Extended Stay bid of $2.2 billion to Starwood, the Wall Street Journal reported on Sunday.

Goldman spokesman Michael DuVally said the company had no comment on the story.

Starwood has said it will enter a bid before the deadline, said Jacqueline Marcus, an attorney for Weil Gotshal, which is representing Extended Stay.

“We hope there will be vigorous bidding at the auction,” said Marcus.

OPENING CREDIT MARKETS

Lefkovits and others said credit was becoming more available, driving interest and qualified bids.

“From a bidder perspective, you always like having fewer people involved,” said Burian. “But participating in a more robust process allows us to have greater comfort and certainty that the auction will yield a prompt conclusion to this bankruptcy case.”

Extended Stay filed for bankruptcy in June when it was unable to make payments on more than $7 billion in debt.

The case is In re: Extended Stay Inc, U.S. Bankruptcy Court, Southern District of New York, No. 09-13764. (Reporting by Chelsea Emery; Editing by Gary Hill)