Sources stated that Extended Stay Hotels is preparing to sell stakes in the company to the public. A market debut would signal another phase of recovery for the once-troubled lodging firm. Its owners want to take advantage of a rising stock market, said people familiar with the plans.

The people said that Extended Stay might file regulatory papers as soon as this week to state its intention to engage in an initial public offering.

The hotel chain has enrolled Goldman Sachs Group Inc., J.P. Morgan Chase & Co., and Deutsche Bank AG  to work on the IPO. The market debut might come at some point toward the end of 2013, one of the sources said.

A joint venture between investment firms Paulson & Co and Centerbridge Partners LP along with Blackstone Group LP, a private-equity firm acquired Extended Stay Hotels for a little less than US$4 billion in 2010 at a bankruptcy auction.