Sunstone Offers Stocks

Sunstone Hotel Investors Inc. said Monday it has begun a public offering of 9 million shares of common stock.

The hotel real estate investment trust said it plans to use proceeds to help fund its $322-million acquisition of Kahler Realty Corp., a Minnesota-based owner of 17 hotels, from New York investment firm Westbrook Partners.

Sunstone said it expects to complete the public stock offering in October and will have about 34.5 million shares outstanding after that. The stock closed Monday at $16.19, down 6 cents a share, on the New York Stock Exchange.

Merrill Lynch & Co. and Bear Stearns & Co. are leading the underwriters group for the offering.