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Blackstone to buy real estate investment trust Strategic Hotels in roughly $4 billion deal

The private equity firm Blackstone will spend nearly $4 billion to buy real estate investment trust Strategic Hotels & Resorts Inc., which specializes in high-end hotels and resorts.

Blackstone Real Estate Partners VIII LP will pay $14.25 for each outstanding share of Strategic. That represents a 13 per cent premium to the stock’s trading price on July 23, before a media report detailed a potential transaction.

The companies said Tuesday that the deal is valued at about $6 billion, including debt. They expect to complete the acquisition by next year’s first quarter.

Chicago-based Strategic Hotels has an ownership interest in 17 properties with 7,921 rooms as well as meeting and banquet space. Its portfolio includes Ritz-Carlton locations in California, the Fairmont Scottsdale, Arizona, and the Four Seasons Resort in Jackson Hole, Wyoming.

The company said last month that its board had retained JP Morgan and was exploring options that included a potential sale.

Shares of Strategic Hotels jumped 3.5 per cent, or 48 cents, to $14.07 Tuesday morning, or more than double the roughly 1.5 per cent advance of broader indexes. The shares had climbed 2.8 per cent so far this year, as of Friday.