Goldman Sachs To Finance Extended Stay Bid

NEW YORK (Reuters) – Goldman Sachs Group Inc. (GS.N) is close to a deal to provide financing of $2.2 billion to one of the groups bidding for mid-priced U.S. hotel chain Extended Stay, the Wall Street Journal reported on Sunday.

It would provide the financing for the bidding group led by Starwood Capital Group, the paper said.

Starwood’s group has agreed to invest $905 million in Extended Stay, and is bidding against a team led by investment companies Centerbridge Partners and Paulson & Co.

An investor group led by David Lichtenstein’s Lightstone Group bought Extended Stay in June 2007. Extended Stay was forced into bankruptcy last year after its projected cash flows declined amid the recession and it could not keep servicing more than $7 billion in debt.

Goldman was not immediately available for comment. Starwood declined comment. (Editing by Lincoln Feast)