NEW YORK (AP) — La Quinta's stock rose in the hotel chain's return to the stock market.
The Irving, Texas-based company was publicly traded for more than 30 years before being acquired by private equity firm Blackstone in 2006. Blackstone paid $2.3 billion in cash and also assumed La Quinta's debt, giving that deal a value of about $3.4 billion.
The IPO announced Tuesday night raised $651 million and valued the company at about $2.1 billion. Shares priced below the company's prediction, suggesting lukewarm demand from investors. The stock added 78 cents, or 4.6 percent, to $17.78 Wednesday afternoon after declining earlier.
La Quinta's debut comes amid growing demand for IPOs amid a rising stock market. The hotel industry has also started to recover from a deep slump after the recession.
Begun in 1968 in San Antonio, La Quinta runs select-service hotels, which typically have fewer amenities than full-service hotels. Under Blackstone's repositioning, La Quinta's franchise business has grown and the company says it has become more competitive with competitors such as Holiday Inn Express. It posted a profit last year from a loss in 2012, its sales improved and revenue per available room — a key gauge of a hotel operator's performance — grew nearly 7 percent. It had 834 hotels at the end of 2013.