While the shares priced below expectations, La Quinta added about 1.1 million shares to the offering, which was initially planned to include 37.2 million. That takes some of the sting out of the lower price and the soft start to trading.
Underwriters for the offering included Morgan Stanley and J.P. Morgan, among others, and the underwriters have a 30-day option on an additional 5.8 million shares.
La Quinta anticipates proceeds of around $650 million. Proceeds will be used as partial repayment of borrowings from the company’s principal owner, Blackstone Group L.P. (NYSE: BX). Blackstone will retain ownership of 63.8% of the company following the IPO.
Blackstone fired off two hotel IPOs late last year: Extended Stay America Inc. (NYSE: STAY), which launched in November, and Hilton Worldwide Holdings Inc. (NYSE: HLT), which launched in December. The private equity firm is the largest hotel operator in the United States. La Quinta operated 834 hotels in 2013 in 46 U.S. states, Canada and Mexico.
La Quinta shares traded up about 0.1% at $17.14 about 90 minutes after trading began.
ALSO READ: Upcoming IPO Previews: Ally Financial Tops the List of Ten
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