Hilton Hotels float raises $2.3bn giving Blackstone huge profits

 
Michael Bow
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INVESTORS checked into Hilton Hotel last night after the private equity-backed chain priced its initial public offering (IPO) near the top end of the range.

The company, which was backed by Blackstone in 2007, priced its shares at $20 a piece – raising about $2.34bn after selling 117.6m shares to investors.

The IPO is the second largest in the states this year after oil pipeline provider Plains GP Holdings raised $2.82bn.

It starts trading on the New York Stock Exchange today – under the ticker HLT.

The deal is one of the biggest private equity floats since the financial crisis, and marks a huge paper profit for Blackstone, who will continue to own 76 per cent of shares in the company after today.

Blackstone bought the company for $27bn in a deal which was mainly backed by debt.

Overall it has ploughed around $6.5bn of equity into the company. Based on yesterday’s float price, Blackstone’s 76 per cent stake in the firm post-IPO will be worth about $15bn.

That would give Blackstone a profit on paper of $8.5bn, the second largest amount ever recorded in a private equity backed deal. The largest was the sale of LyondellBasell Industries by Apollo Global Management, which gave a paper profit of more than $10bn.

Hilton, which has scores of hotels dotted around London, was founded in 1919 by Conrad Hilton and now has around 4,000 hotels in more than 90 countries.

The float marks the latest successful exit for Blackstone after it IPO-ed Legoland owner Merlin Entertainments in London last month.

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