updated 6/14/2005 9:20:07 AM ET 2005-06-14T13:20:07

Upscale and luxury hotel operator Wyndham International Inc. said Tuesday that is has agreed to be acquired by an affiliate of Blackstone Group for $1.15 per share in cash, or about $3.24 billion.

Wyndham's board has unanimously approved the deal, and recommended approval by the company's shareholders. Wyndham said it expects the merger to close in the fourth quarter of 2005, subject to shareholder and antitrust approvals.

In addition to its flagship brand, Wyndham operates about 20 franchised hotels under such well-known brands as Doubletree, Hilton, Holiday Inn, Hyatt, and Marriott.

Wyndham previously announced a recapitalization agreement with certain investors of Wyndham's Series B preferred shares in which all outstanding shares of Series A and Series B preferred stock would be converted into common shares.

Under terms of the merger agreement, holders of preferred shares will receive $72.17 per share in cash, subject to potential adjustment to reflect additional shares that may be issued as dividends after June 30.

Bear, Stearns & Co. acted as financial adviser to Wyndham in connection with the strategic review and this transaction. Simpson Thacher & Bartlett LLP acted as legal adviser to Blackstone.

Shares of Wyndham closed Monday at 97 cents on the American Stock Exchange, but shot up 23 cents, or nearly 24 percent, to $1.20 in premarket activity.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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