SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

Filed by the Registrant ¨

Filed by a Party other than the Registrant þ

Check the appropriate box:

Extended Stay America, Inc.

(Name of Registrant as Specified in Its Charter)

Tarsadia Capital, LLC

Ravi Bellur

Michael Ching

Vikram Patel

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (check the appropriate box):

On May 7, 2021, Tarsadia Capital, LLC ("Tarsadia") issued a press release (the “Press Release”) announcing that it had filed a definitive merger proxy statement outlining its strong opposition to the proposed merger acquisition (the "Merger") of Extended Stay America, Inc. (the “Company”) and encouraging stockholders to vote against the Merger. A copy of the Press Release is filed herewith as Exhibit 1. The Press Release links to a public letter from Tarsadia to the Company's stockholders, filed herewith as Exhibit 2.

The Press Release and the letter to stockholders were also posted to Tarsadia's campaign website, www.ABetterFutureForStay.com (the "Website"). Copies of other materials posted to the Website are filed herewith as Exhibit 3. The Website links to certain news articles, which are reproduced herein as Exhibit 4. Tarsadia has neither sought nor obtained the consent from any third party to use any statements or information contained herein that have been obtained or derived from statements made or published by such third parties. Any such statements or information should not be viewed as indicating the support of such third parties for the views expressed herein.

Exhibit 1

Tarsadia Capital Files Definitive Proxy Statement to Solicit Votes in Opposition to Sale of Extended Stay America to Blackstone and Starwood

Sends Letter to STAY Shareholders Detailing Compelling Reasons to Vote Against Sale

Believes Sale Would Come at the Wrong Time and Wrong Price

In Tarsadia’s View, Sales Process Was Flawed and Paired Entities’ Boards Failed to Pursue Alternatives

Highlights That Two Sitting ESH Directors Voted Against the Deal

Believes Company Has Significant Opportunities to Create Value – Especially with an Improved Board – Which is Why Tarsadia Nominated Three Independent, World-Class Candidates for Election as Directors

Vote on the GOLD Card TODAY to Protect Your Investment in STAY

NEW YORK – May 7, 2021 – Tarsadia Capital, LLC together with its affiliates, associates and funds it manages (“Tarsadia”), today sent a letter and proxy statement to shareholders of Extended Stay America, Inc. (NYSE: STAY) (“ESA” or the “Company”) and ESH Hospitality, Inc. (“ESH” and together with the Company, the “Paired Entities”) encouraging shareholders to reject the acquisition of STAY by Blackstone Real Estate Partners and Starwood Capital Group for $19.50 per paired share (the “Sale”). The Sale is subject to a vote of shareholders at the upcoming Special Meeting of Shareholders (“the Special Meeting”) scheduled to be held on June 8, 2021.

The full text of the letter is available at: www.ABetterFutureForStay.com/s/STAY-Shareholder-Letter-May-7-pdf.

The letter describes why Tarsadia intends to vote against the Sale and why it believes other shareholders should do the same:

Tarsadia Urges STAY Shareholders to Vote AGAINST the Sale

For more information, visit  www.ABetterFutureForStay.com.

About Tarsadia Capital

Tarsadia Capital, LLC is the New York-based investment management company of a family office. Tarsadia Capital has a flexible and long-duration investment mandate that focuses on equities and commodities globally. Our investment process employs deep fundamental research on secular inflections to identify and build conviction around asymmetric risk/reward opportunities that will play out over multi-year time horizons.

Disclaimer

Tarsadia Capital, LLC (“Tarsadia”), Ravi Bellur, Michael Ching and Vikram Patel (collectively, the “Participants”) have filed with the Securities and Exchange Commission (the “SEC”) a definitive proxy statement and accompanying form of proxy to be used in connection with the solicitation of proxies from the shareholders of the Company for the Special Meeting. All shareholders of the Company are advised to read the definitive proxy statement and other documents related to the solicitation of proxies by the Participants, as they contain important information, including additional information related to the Participants. The definitive proxy statement and an accompanying GOLD proxy card will be furnished to some or all of the Company’s shareholders and will be, along with other relevant documents, available at no charge on Tarsadia’s campaign website at: www.ABetterFutureForStay.com and the SEC website at http://www.sec.gov/.

Information about the Participants and a description of their direct or indirect interests by security holdings is contained in the definitive proxy statement filed by the Participants with the SEC on May 7, 2021. This document is available free of charge on the SEC website.

This material does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein in any state to any person. In addition, the discussions and opinions in this letter and the material contained herein are for general information only, and are not intended to provide investment advice. All statements contained in this letter that are not clearly historical in nature or that necessarily depend on future events are “forward-looking statements,” which are not guarantees of future performance or results, and the words “anticipate,” “believe,” “expect,” “potential,” “could,” “opportunity,” “estimate,” and similar expressions are generally intended to identify forward-looking statements.

The projected results and statements contained in this letter and the material contained herein that are not historical facts are based on current expectations, speak only as of the date of this letter and involve risks that may cause the actual results to be materially different. Certain information included in this material is based on data obtained from sources considered to be reliable. No representation is made with respect to the accuracy or completeness of such data, and any analyses provided to assist the recipient of this material in evaluating the matters described herein may be based on subjective assessments and assumptions and may use one among alternative methodologies that produce different results. Accordingly, any analyses should also not be viewed as factual and also should not be relied upon as an accurate prediction of future results.

All figures are unaudited estimates and subject to revision without notice. Tarsadia Capital disclaims any obligation to update the information herein and reserves the right to change any of its opinions expressed herein at any time as it deems appropriate. Past performance is not indicative of future results. Tarsadia Capital has neither sought nor obtained the consent from any third party to use any statements or information contained herein that have been obtained or derived from statements made or published by such third parties. Except as otherwise expressly stated herein, any such statements or information should not be viewed as indicating the support of such third parties for the views expressed herein.

Exhibit 2

Exhibit 3

Exhibit 4 

Extended Stay Directors Oppose Blackstone-Starwood Deal

A pair of directors pile on with shareholder groups with assertions that the $6 billion deal undervalued the company and was ill-timed given a rebound in hotel stocks.

By Nikitha Sattiraju

April 15, 2021 12:37 PM

Two independent Extended Stay America Inc. (STAY) board directors are opposing the hotel owner and operator's $6 billion deal with private equity firms Blackstone Real Estate Partners and Starwood Capital Group LLC.

The directors — Neil Brown and Simon Turner — felt the deal undervalued the company and that the timing was not appropriate given the rebound in hotel stocks, according to a proxy filing on Tuesday, April 13. Brown argued that Extended Stay could "generate superior value" by executing its business plan instead of selling the company.

Charlotte, N.C.-based Extended Stay trades as a paired share with lodging REIT ESH Hospitality Inc. The operating company and the REIT have separate boards, with Brown and Turner serving on the latter.

Under the company's deal with Blackstone and Starwood, a joint venture of the private equity firms will pay $19.50 per paired share in cash. Turner said any price below $20 per paired share is insufficient, according to the filing. He also expressed concerns over the higher termination fee insisted upon by the firms for increasing the price from a previous offer of $19.25 to the agreed-upon $19.50 per paired share.

The directors' resistance to the deal comes amid mounting opposition from Extended Stay shareholders against the transaction for similar reasons. Tarsadia Capital LLC, which owns a 3.9% stake in the company, said in March that the deal "severely undervalues" Extended Stay, urging the hotel owner to focus on asset sales and franchising. Other investors, including Hawk Ridge Capital Management, which owns around a 2% stake in the company, are reportedly planning to vote against the deal as well.

Shareholders are likely expecting a $0.25 to $0.50 per paired share increase to the current offer and will focus on the opposition from Brown and Turner to get the deal "sweetener," Robert W. Baird & Co. senior research analyst Michael Bellisario said in a note on Tuesday.

"We expect to hear more from unsatisfied shareholders in the coming days," Bellisario said.

Extended Stay, for its part, defended the deal saying it offered better value to shareholders compared to the execution of its business plan which would require $750 million in investments over the next three years, or about 20% of the company's projected revenue during that period, it said in a press release on Tuesday.

The company said it considered several strategic alternatives over the past few years, including a separation of its operating company and REIT, previous individual offers from Blackstone, Starwood and undisclosed suitors and a buyout proposal from Tarsadia last year, all of which Extended Stay deemed unattractive.

The hotel owner settled on the deal after much back and forth with Blackstone and Starwood, the filing shows. Blackstone initially offered $17.75 per paired share before revising up the price five times over three months and partnering with Starwood as a co-investor.

The current deal is a 51% premium to Extended Stay's pre-pandemic share price and 11.6 times the company's estimated 2022 Ebitda, according to the press release.

If the deal doesn't go through, it would be a 'lose-lose-lose' for Extended Stay, its shareholders and Blackstone-Starwood, Bellisario said. The company's stock will likely go back to trading in the mid-$16 range per paired share, he added.

Extended Stay's stock was up 0.64% at $19.80 per share Thursday morning.

Two Extended Stay Directors Opposed Blackstone-Starwood Deal

By Scott Deveau

April 14, 2021, 11:16 AM EDT; Updated on April 14, 2021, 12:37 PM EDT

It turns out it’s not just some of Extended Stay America Inc.’s top shareholders who oppose its proposed $6 billion takeover. Two of the company’s own directors are against it as well.

Extended Stay disclosed in a regulatory filing late Tuesday that while the majority of the board approved the deal with Blackstone Group Inc. and Starwood Capital Group, Neil Brown and Simon Turner opposed it, saying the $19.50-a-share price was insufficient, and below similar transactions in recent years.

They were also concerned about the timing of the deal in light of a recent rebound in hotel stocks, and the potential for further recovery with the U.S. stimulus plan and increasing Covid-19 vaccinations, the filing shows.

Turner was of the belief a transaction below $20 a share was inappropriate, and also was concerned about changes to the termination fee that were made in order for the buyers to raise their bid to $19.50 a share from $19.25, according to the filing.

Extended Stay has two boards, one for the C-Corp and one for the real estate investment trust. Both Brown and Turner sit on the REIT board, according to the company’s website.

The concerns raised by the two directors are similar to those of five top investors who came out against the deal. Tarsadia Capital LLC, Hawk Ridge Capital Management, SouthernSun Asset Management LLC, Cooke & Bieler LP and River Road Asset Management LLC have all said they plan to vote against the transaction.

‘Obviously Inadequate’

“We are dismayed that the board would approve such an obviously inadequate price and shocked that the board did so over the objection of two of its own members,” Tarsadia said in an emailed statement.

Collectively, the investors own roughly 13% of Extended Stay’s outstanding common stock, according to data compiled by Bloomberg.

Representatives for the other opposing investors weren’t immediately available for comment. A representative for Blackstone and Starwood declined to comment.

Extended Stay defended its decision to sell, arguing the deal would provide immediate, certain and compelling value for shareholders.

“The company ran a thorough, rigorous and thoughtful process, which included a careful consideration of the alternatives available,” a spokesperson said in an email Tuesday. “I would note that the company has thoughtful and independent board members, and paid careful attention to the points raised by the two dissenting directors. However, after detailed discussions, the boards ultimately concluded that the immediate cash certainty at a premium to the valuation over multiple time periods was in the best interest of shareholders.”

‘Lose-Lose-Lose’

Michael Bellisario, an analyst with Robert W. Baird & Co., said in a note to clients it was “intriguing” that two board members oppose the transaction, and that shareholders seeking a sweetener are likely to focus on this. But he said a voted-down deal would be a “lose-lose-lose” for investors because the company would likely trade back to $16 a share.

Extended Stay shares have traded above the offer price since March 22. They were up 0.4% to $19.80 at 12:36 p.m. in New York Tuesday, giving the company a market value of $3.5 billion.

Blackstone and Starwood agreed last month to acquire Extended Stay in a 50-50 joint venture in what would be the biggest deal in the hotel industry since Covid-19 decimated the travel business. The filing Tuesday shows that talks between the parties were on and off since 2017, and that at least two other undisclosed potential buyers had expressed interest over the years.

Investor Tarsadia had also discussed numerous investment ideas with Extended Stay beginning in August 2020, including various transactions the company could pursue, the documents show.

Extended Stay Agrees to Be Taken Private. Investors Don’t Like What That Does to the Stock.

By Carleton English

March 26, 2021 4:26 pm ET

Investors see some room for improvement in a deal for Extended Stay America.

Earlier this month, lodging chain Extended Stay (ticker: STAY) said it agreed to be taken private for $6 billion cash by a partnership of Blackstone Group (BX) and private-investment firm Starwood Capital Group. The deal, which values Extended Stay stock at $19.50 apiece, offered a nice premium to recent pandemic trading levels, but is 50 cents a share lower than the company’s initial-public-offering price in November 2013.

Tarsadia Capital, which owns a 3.9% stake in Extended Stay, said on Monday that the deal undervalues shares, particularly since the industry is in the midst of coming out of the worst downturn it’s ever seen. Extended Stay has long been a “disappointment” to investors and Tarsadia nominated three members to its board ahead of the deal announcement to help turn things around. Since then, other investors have spoken out against the deal, according to Bloomberg reports.

On Thursday Extended Stay issued a statement that the deal represented “a compelling and certain return.” Wall Street is less convinced, with shares trading above the recent offer price.

As the economy emerges from pandemic-induced pain, companies and investors alike in troubled industries have been leery of low-ball offers. Recently, office real-estate investment trust Columbia Property Trust (CPX) accused a group of activists of trying to “opportunistically acquire” the company.

In this climate, Extended Stay’s buyers need to register investor disappointment.

Investor Opposition Mounts For Extended Stay’s Takeover Plan

By Scott Deveau

March 23, 2021, 8:00 AM EDT; Updated on March 23, 2021, 10:37 AM EDT

Opposition to Extended Stay America Inc.’s plans to sell itself to Blackstone Group and Starwood Capital Group is mounting with three more sizable shareholders saying they plan to vote against the deal.

SouthernSun Asset Management LLC, Cooke & Bieler LP, and River Road Asset Management LLC said they all plan to oppose the deal because the $6 billion purchase price undervalues the company. They also argue it comes at a time when Extended Stay’s prospects are strong, and have concerns about why the company chose to sell.

Michael Cook, SouthernSun chief executive officer, said in a letter to clients Tuesday that for over 32 years his firm has never before feltcompelled to write a formal letter in opposition to a corporate action in its portfolio. He said the valuation, timing and process around the Extended Stay deal last week were sufficient to prompt it to do so.

“The deal undervalues Extended Stay’s business, is at odds with management’s own assessments, occurs at a profoundly inopportune time relative to the market recovery, and was the product of a flawed and truncated diligence process,” Cook said in the letter, a copy of which was obtained by Bloomberg.

William Weber, a partner and portfolio manager at Cooke & Bieler, said he also opposes the deal. Cooke & Bieler owned a 1.8% stake in Extended Stay at the end of December, according to data compiled by Bloomberg.

“The offer does fundamentally undervalue the business. Covid was clearly a detour for the business but we were very excited about the prospects of finally Extended Stay returning to a net unit growth on a system-wide basis,” Weber said in an interview.

Representatives for Blackstone, Starwood and Extended Stay were not immediately available for comment.

Blackstone and Starwood agreed to acquire Extended Stay last week for $19.50 a share, a 15% premium to where the shares previously closed, in what would be the biggest deal in the hotel industry since the Covid-19 pandemic decimated travel.

Extended Stay rose 0.5% to $19.84 at 10:28 a.m. in New York on Tuesday, giving the company a market value of about $3.5 billion.

Justin Akin, a portfolio manager at River Road, which owns a 3.2% stake in Extended Stay, said he thinks the price is light too, and opposes the deal under its current terms.

“It’s at a discount to any kind of historical M&A transaction in the space. Clearly, they did well during the Covid downturn in terms of occupancy and significantly outperforming peers,” Akin said in an interview. “We’re not against a takeout. We want to see a fair value for it, and we think $19.50 is not that.”

Two of its top-10 investors -- Tarsadia Capital LLC and Hawk Ridge Capital Management -- have already come out against the deal. Collectively, the opposing shareholders hold nearly 13% of the company’s outstanding shares.

SouthernSun owned a 1.9% stake in Extended Stay at the end of December, according to data compiled by Bloomberg. Cook said in the letter he believes Extended Stay has a reasonably clear path forward for the first time since SouthernSun first invested in 2017, after three CEOs, a distracting strategic review, and the pandemic last year.

Cook questioned why the company would sell at a time when the economy is recovering, expectations are high that the lodging industry stands to benefit as Americans get the vaccine, and Extended Stay’s assets sales have resumed. He said he was also concerned the board didn’t solicit other offers and that the transaction includes a clause barring the solicitation of other buyers.

Two Extended Stay Shareholders to Vote Against Blackstone Deal

By Scott Deveau

March 22, 2021, 8:30 AM EDT

Two top-ten holders in Extended Stay America Inc. say they plan to vote against its proposed takeover by Blackstone Group Inc. and Starwood Capital Group, arguing the $6 billion offer undervalues the lodging company.

Tarsadia Capital LLC, which owns roughly a 3.9% stake in Extended Stay, said in a letter to shareholders Monday it not only believes the price is wrong but the timing is off as the travel industry begins its recovery from the pandemic. The family office said it was concerned Extended Stay rushed the deal because Tarsadia had nominated three directors to its board and believes there is more value to be created on a standalone basis.

“Perhaps this disappointing transaction is the result of the incumbent board attempting to sidestep accountability for the company’s many years of underperformance right before the start of a proxy contest,” the firm said in the letter, a copy of which was obtained by Bloomberg. “Regardless, one thing is clear: with clear line of sight to greater results and a bright future, selling for a paltry price is not the best outcome for shareholders.”

Tarsadia is not alone in its views.

Another top-ten holder, Hawk Ridge Capital Management, which owns roughly a 2% stake in Extended Stay, plans to vote against the deal as well. David Brown, Hawk Ridge founder, said he was disappointed by what he called a “tiny premium,” given his belief that the company was well positioned to take advantage of the turnaround in the industry. He said he believed that management was on the right path.

“I understand why the buyers want to buy it,” Brown said in an interview. “It’s a big question mark why the board decided to go down this path.”

Tarsadia’s nominees included the former chief executive officer of Choice Hotels, Stephen Joyce, Ross Bierkan, former CEO of RLJ Lodging Trust, and Michael Leven, the former president of Las Vegas Sands.

Representatives for Blackstone, Starwood and Extended Stay were not immediately available for comment.

Blackstone and Starwood agreed to acquire Extended Stay last week for $19.50 a share, a 15% premium to where the shares previously closed, in what would be the biggest deal in the hotel industry since the Covid-19 pandemic decimated the travel business. The merger documents show that Blackstone signed a confidentially agreement on Feb. 10, just five weeks before the deal was announced, while Starwood signed its own a month later, five days before the deal was announced on March 15.

Tarsadia argues the purchase price is at a significant discount to the average trading multiple of its peers, and is the lowest transaction multiple in the U.S. lodging space in more than five years.

“There is, in our view, no reason to sell now and no reason to sell at this price,” it said.

The firm said Extended Stay will benefit from an upswing in travel, akin to what happened in the years following the lodging recessions of 2001 and 2009. The average three-year total return for lodging stocks following the one-year anniversary of the trough in each of those recessions were 124% and 59% respectively, it noted.

Extended Stay also has plenty of levers it can pull to improve value for shareholders, including selling a significant portion of its portfolio for multifamily and affordable housing conversions at a premium to what Blackstone and Starwood are offering, Tarsadia said. Extended Stay could also grow faster through more aggressive franchising efforts, and its under-levered balance sheet provides another avenue to return capital.

“In short, selling now, before the cyclical upturn and before these operating, asset sale, balance sheet optimization and capital return opportunities are realized, is a massive mistake unless the buyer is paying a significant premium to account for these inherent opportunities,” the firm said.

Tarsadia Capital, LLC (“Tarsadia”), Ravi Bellur, Michael Ching and Vikram Patel (collectively, the “Participants”) have filed with the Securities and Exchange Commission (the “SEC”) a definitive proxy statement and accompanying form of proxy to be used in connection with the solicitation of proxies from the shareholders of the Company for the Special Meeting. All shareholders of the Company are advised to read the definitive proxy statement and other documents related to the solicitation of proxies by the Participants, as they contain important information, including additional information related to the Participants. The definitive proxy statement and an accompanying GOLD proxy card will be furnished to some or all of the Company’s shareholders and will be, along with other relevant documents, available at no charge on Tarsadia’s campaign website at: www.ABetterFutureForStay.com and the SEC website at http://www.sec.gov/. Information about the Participants and a description of their direct or indirect interests by security holdings is contained in the definitive proxy statement filed by the Participants with the SEC on May 7, 2021. This document is available free of charge on the SEC website.