Hilton checks in with $1.25bn flotation plans

Michael Bow
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STOCK market investors got the chance to book into Hilton Worldwide again yesterday after its owners announced plans to release it from private hands with a market float

The hotel chain’s owners, Blackstone, will sell the business in a public offering of shares hoping to net $1.25bn (£790m), it announced yesterday.

Deutsche Bank, Goldman Sachs, Bank of America Merrill Lynch and Morgan Stanley are the lead underwriters on the initial public offering (IPO).

It is thought the offering’s price and number of shares has not been decided but Blackstone is considering selling 15 to 20 per cent of its stake onto the market in the initial float in the first six months of next year.

A float would value Blackstone at $30bn, substantially more than Blackstone originally paid for it.

Hilton manages 4,000 hotels in 90 countries around the world and has been in operation since 1919.

“The only caveat regarding the stock is that we have no idea what Blackstone is going to do with their remaining stake once the company goes public and that might be a slight overhang on the stock,” MLV & Co senior analyst Ryan Meliker said.

The float brings to a close a tumultuous time in the history of the chain after it was taken private by Wall Street private equity giant Blackstone in one of the largest leveraged buyouts of all time.

Taking the company private in 2007 cost Blackstone $26.7bn, a high water mark in the pre-financial crisis buyout boom.

But hotels have roared back into favour this year, with the Dow Jones US Hotels index rising 18 per cent and shares in top hotels like Marriott soaring on investor demand.

News of the deal sent Blackstone’s shares 0.4 per cent in trading yesterday to close at $22.76.