Blackstone Real Estate Partners IX L.P., a fund managed by The Blackstone Group Inc. (NYSE:BX) and Starwood Distressed Opportunity Fund XII Global, L.P., a fund managed by Starwood Capital Operations, LLC signed a definitive agreement to acquire Extended Stay America, Inc. (NasdaqGS:STAY) from Tarsadia Capital, LLC, Hawk Ridge Capital Management, SouthernSun Asset Management LLC, Cooke & Bieler LP, River Road Asset Management LLC and others for approximately $3.7 billion on March 14, 2021. The consideration comprises of a cash payment of $19.5 per share. As of June 1, 2021, the consideration comprises of a cash payment of $20.5 per share. At completion, Blackwood and Starwood will have a shareholding of 50% each in Extended Stay America (ESA). Additionally, through this transaction ESA's paired share Real Estate Investment Trust, ESH Hospitality, Inc will also be acquired. The parties has agreed to arrange debt financing in connection with the mergers in an aggregate amount not to exceed $4.5 billion. Under the terms of the agreement, at the request of Blackstone and Starwood, immediately prior to the Effective Time, ESA will pay a special dividend of up to $1.75 per share and the merger consideration will be reduced by the amount of such special dividend. CitiGroup and J.P. Morgan are providing debt financing to Blackwood and Starwood. Additionally, Blackwood and Starwood have executed equity financing commitment letters for financing the transactions. Upon a termination, under certain circumstances ESA will be required to pay a termination fee of $105 million, except that the termination fee will be $61.25 million if specific conditions are met. Blackstone and Starwood will be required to pay a fee of $300 million at termination.

The completion of the transaction is contingent upon customary closing conditions, including approval of the ESA stockholders and receipt of certain regulatory approvals. The transaction has been unanimously approved by ESA's Board of Directors and has also been approved by ESH's Board of Directors. The Extended Stay America board unanimously recommends that stockholders vote “FOR” the adoption of the merger agreement. The Hospitality board also recommends that stockholders vote “FOR” the adoption of the merger agreement. In connection with the transaction, an affiliate of Starwood Capital, which owns approximately 9.4% of ESA's outstanding paired shares, has entered into a support agreement whereby it has agreed to vote its shares in favor of the transaction. The Board of Directors of STAY has scheduled a special meeting of shareholders for the purpose of adopting the Merger Agreement. The Special Meeting will be a virtual meeting held on June 8, 2021, at 8:30 a.m., Eastern Time. As of April 13, 2021, the proposed acquisition of Extended Stay America has been cleared by the Competition and Consumer Protection Commission. As of April 26, 2021, Tarsadia believes that the Merger is not in the best interests of shareholders. As of May 7, 2021, five top investors, Tarsadia Capital LLC, Hawk Ridge Capital Management, SouthernSun Asset Management LLC, Cooke & Bieler LP and River Road Asset Management LLC have all said they plan to vote against the transaction. As per announcement of May 14, 2021, the transaction has received all regulatory approvals. Institutional Shareholder Services Inc. recommends that Extended Stay shareholders vote FOR the agreement at the Extended Stay America's special meetings of Shareholders, which is scheduled to be adjourned to June 11, 2021. As of June 11, 2021, the shareholders of Extended Stay America approved the transaction. The transaction is expected to occur in the second quarter of 2021. As of May 14, 2021, transaction is expected to close on June 11, 2021. As of June 15, 2021, the transaction is expected to close on June 16, 2021.

Goldman Sachs & Co. LLC acted as financial advisor and fairness opinion provider and Philip Richter and Warren S. de Wied of Fried, Frank, Harris, Shriver & Jacobson LLP acted as legal advisor to Extended Stay America. Goldman Sachs & Co. LLC will receive approximately $30 million in advisory fees from Extended Stay America. J.P. Morgan, and Citigroup Global Markets Inc. acted as financial advisors to Blackstone and Starwood. Brian M. Stadler, Sasan Mehrara, Whitney Salinaand, Janet K. Yu, Nancy Mehlman, Andrew Blau, Joo Hyun Lee, Jonathan Ozner, Lori Lesser, Matthew B. Rogers of Simpson Thacher & Bartlett LLP acted as legal advisor to Blackstone. Michael P. Brueck, Joshua N. Korff, Scott A. Berger, Maggie D. Flores, David L. Perechocky, Jonathan A. Schechter, Christopher L. Hartmann, Richard A. Grossmann, Michael Beinus, and Katherine A. Rocco of Kirkland & Ellis LLP acted as legal advisor to Starwood Capital. Okapi Partners LLC acted as proxy solicitor to Extended Stay America, Inc. for which it will be paid fee of up to approximately $250,000. Morrow & Co., LLC acted as an information agent for Extended Stay America. Morgan Stanley acted as financial advisor to Blackstone.

Blackstone Real Estate Partners IX L.P., a fund managed by The Blackstone Group Inc. (NYSE:BX) and Starwood Distressed Opportunity Fund XII Global, L.P., a fund managed by Starwood Capital Operations completed the acquisition of Extended Stay America, Inc. (NasdaqGS:STAY) from Tarsadia Capital, LLC, Hawk Ridge Capital Management, SouthernSun Asset Management LLC, Cooke & Bieler LP, River Road Asset Management LLC and others on June 16, 2021. On June 16, 2021, in connection with the Mergers, all members of the board of directors of the Paired Entities ceased to serve in such capacity at the Effective Time. BofA Securities, Inc. acted as financial advisor to Extended Stay America and Deutsche Bank Securities Inc. acted as financial advisor to Blackstone and Starwood and also provided debt financing.