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Goldman Sachs Real Estate Fund to Buy Equity Inns for $2.2 Billion

Equity Inns, which owns mid-market hotels, has agreed to be acquired by Goldman Sachs' real estate fund, Whitehall, in a deal worth $2.2 billion, including assumed debt, the company said on Thursday.

The price of $23 a share represents a premium of 19 percent over Equity Inns' closing price on Wednesday. Shares of Equity Inns surged on the news.

Equity Inns owns more than 130 hotels under brands such as Courtyard, Hilton Garden Inn and Hampton Inn.

The hotel industry is in the midst of a multiyear boom as robust demand has allowed hoteliers to steadily raise rates.

The upbeat market environment, supported by limited construction of new hotels, has made lodging assets hot commodities.

On Monday, Legacy Hotels Real Estate Investment Trust, the biggest lodging REIT in Canada, said it was in talks with a number of investment groups regarding a possible takeover and had received nonbinding offers that value the company's equity at $1.36 billion.

In February, luxury hotel operator Four Seasons Hotels Inc. agreed to a $3.37 billion takeover offer from a group that included Bill Gates' Cascade Investments LLC and Saudi Prince Alwaleed bin Talal.

Whitehall's acquisition of Equity Inns is expected to close in the fourth quarter, subject to shareholder approval and other closing conditions.