San Clemente-based Sunstone Hotel Investors Inc. said Wednesday it plans to sell about $194 million worth of stock to help fund its buy of the Century Plaza Hotel & Spa in Century City.
The company plans to sell 6.7 million shares, including about 6 million that the company is selling and 706,446 shares being sold by shareholders, according to a filing with the Securities and Exchange Commission.
Sunstone’s share of the stock sale is $151 million, based on a $25.15 offering price. The lead underwriters for the offering, Citigroup and Merrill Lynch & Co., could buy an additional 1 million shares.
A Sunstone partnership will use its share of the sale to finance part of the acquisition price of the Century Plaza, the company said.
Sunstone said last week that it plans to buy Century Plaza for $293 million. Sunstone also is set to spend $22.5 million to renovate the 728-room hotel and turn it into a Hyatt Regency. At the time, the company said it planned to borrow about $175 million to help fund the buy.
Robert A. Alter, Sunstone’s chief executive, recently said that the deal makes for the third high-end hotel that his company has bought under the Hyatt brand name.
The others include the 403-room Hyatt Regency Newport Beach and the Hyatt Regency in Atlanta. Sunstone will own 61 hotels when the deal closes in the fourth quarter.
Shares of Sunstone were trading at $25.3 on Wednesday, down about 10 cents.
