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article imageLa Quinta shares rise after IPO raises $650 mn

By AFP     Apr 9, 2014 in Business

Hotel chain La Quinta rose Wednesday in its first day of trade after Blackstone Group successfully launched its third hotel stock offering since November into a hot IPO market.

La Quinta Holdings shares rose 3.1 percent to $17.53 in early afternoon trade after underwriters Tuesday sold the IPO at $17 per share, valuing the hotel chain at $2.1 billion.

However, the offering came below the $18-21 range the company proposed in late March.

A mid-tier chain with corporate headquarters in Irving, Texas, La Quinta has 834 hotels, of which 357 are owned and operated and 477 franchised. The company's hotels are in 46 US states, Canada and Mexico.

La Quinta plans to use the funds to repay debt and for "general corporate purposes."

This La Quinta flotation follows earlier Blackstone offerings from Hilton Worldwide and Extended Stay and comes during a heavy week for new stock issues.

Dealogic expects 14 IPOs in all this week, which would make it the busiest since November 2007.

Underwriters sold 38.3 million shares of La Quinta and could sell up 5.7 million additional shares over the next 30 days. The shares trade on the New York Stock Exchange under the "LQ" ticker.

La Quinta was last traded on public markets in 2006, when Blackstone acquired the chain in a deal valued at around $3.4 billion.

The Hilton offering raised $2.7 billion in December and is the largest hotel IPO on record, according to Dealogic. The Extended Stay offering raised roughly $565 million in November.

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