Strategic Hotels & Resorts Inc. said Tuesday that Blackstone Real Estate Partners VIII LP has agreed to buy the luxury hotel company for about $4 billion.

Blackstone will acquire all shares outstanding of Strategic and membership units of the company's subsidiary, Strategic Hotels Funding LLC, for $14.25 per share. Including debt, the enterprise value of the deal is about $6 billion.

"The board thoroughly considered various alternatives over the course of the past few years, and this all-cash offer from Blackstone creates significant stockholder value," said Raymond L. Gellein, chief executive officer of Strategic, in a news release.

The deal is expected to be completed by the first quarter of 2016, pending a stockholders vote that has yet to be scheduled.

In August, Strategic said its board was exploring various options including a potential sale. The announcement came after the disclosure that Bill Gates's investment firm Cascade Investment Inc. had purchased 1.7 million shares of the real-estate investment trust for $21.5 million, bringing its stake to 9.8%.

Cascade also indicated it was interested in approaching Strategic about a potential takeover or other deal, following news reports that Strategic was exploring a sale.

Chicago-based Strategic Hotels owns several luxury properties, including the Essex House overlooking Manhattan's Central Park and the Hotel del Coronado near San Diego. It owns a number of Four Seasons properties, including hotels in Washington, D.C., and Austin, Texas, and a resort in Jackson Hole, Wyo.

Blackstone, meanwhile, has flexed its muscles lately as the world's biggest real-estate investor, recently raising more than $14.5 billion in less than four months to buy properties world-wide.

The sale of Strategic comes as hotel sales are booming and demand for luxury properties soars. Earlier this year, a Chinese insurance company paid $1.95 billion for New York's Waldorf Astoria hotel, a record price for a U.S. hotel.

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(END) Dow Jones Newswires

September 08, 2015 09:45 ET (13:45 GMT)

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