Orange County Business Journal

Sunstone to Issue 18M Shares in Public Offering

Jane Yu Thursday, June 19, 2014

Sunstone Hotel Investors Inc. announced plans to issue 18 million shares of its common stock in a public offering, in part to help pay for its latest resort acquisition.

The Aliso Viejo-based real estate investment trust has stakes in 29 hotel properties throughout the U.S., including a couple in Orange County.

Pricing of the public offering could vary, according to Sunstone, which said the “underwriter may offer shares of common stock” in transactions on the New York Stock Exchange, where its stock currently trades, or in the over-the-counter market. The company said the transaction also could be made at market prices or at negotiated prices.

Sunstone’s stock closed Thursday at $14.61. A rough calculation of the public offering using the recent market price would put the total amount raised at about $263 million.

Sunstone said it expects to use the net proceeds from the offering to help finance its acquisition of the Wailea Beach Marriott Resort & Spa in Maui from a Blackstone affiliate.

The deal, which is Sunstone’s first buy in Hawaii, was signed today at a price of $325.7 million. Part of the payment—about $60 million worth—is expected to be made in common stock directly to the seller, Sunstone said.