Extended Stay America rises in market debutAP , Associated Press
Nov. 13, 2013 10:54 AM ET
NEW YORK (AP) — Hotel operator Extended Stay America stock jumped in its first day as a publicly traded company.
Shares traded as high as $23.90, or 19.5 percent shortly after the opening trade Wednesday. The gain pared to $3.01, or 15.1 percent in late morning trading.
The initial public offering of about 28.3 million shares priced at $20 each, the midpoint of the projected $18 to $21 per share range. Each share includes common stock of Extended Stay America and Class B common stock of real estate investment trust ESH Hospitality Inc. The offering is expected to help ESH Hospitality maintain its qualification as a REIT.
Extended Stay America Inc. raised approximately $566 million in the offering. Most of the proceeds will go toward repaying certain debt held by ESH Hospitality.
The underwriters have a 30-day option to buy up to an additional 4.2 million shares.
Extended Stay America hotels are meant for guests looking for an affordable option when they are anticipating a somewhat lengthy stay. Guests typically include business travelers, professionals on temporary jobs or training assignments, people relocating, temporarily displaced by a storm, home purchase or other event and any others in need of temporary housing.
Fully furnished rooms include kitchens and limited housekeeping services. Rooms are normally rented on a weekly basis or more long term.
Extended Stay America's stock is trading on the New York Stock Exchange under the "STAY" ticker symbol.
The offer is targeted to close on Monday.