Today's Labor Day blockbuster deal: The Blackstone Group is buying Strategic Hotels & Resorts for a reported $6B. That number includes Strategic's existing debt. A Blackstone real estate fund will pay $14.25 a share for the luxury hotel portfolio, a 13% premium to Strategic's intraday trading price on July 23. Rumors that Strategic would test the market floated for weeks before CEO Raymond Gellein confirmed the company was exploring a sale last month. Microsoft's Bill Gates was believed to be in the running; his Cascade Investment bought 1,700,000 shares in Strategic, bringing Cascade's stake in the company to 9.8%, and Cascade had indicated it was interested in buying Strategic. Strategic's Chicago holdings include the Intercontinental Chicago, the Fairmont Chicago Millennium Park hotel and the Marriott Lincolnshire Resort. Strategic put the Marriott Lincolnshire on the market last month, stating the hotel doesn't fit in with its portfolio. [NYT]
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