PRIVATE equity giant Blackstone yesterday generated the second biggest paper profit from a buyout float ever, after shares in hotel chain Hilton Worldwide soared nearly 10 per cent on their debut.
Hilton, which started trading on the New York Stock Exchange yesterday, rallied to a peak of $21.94 after being priced at $20 a share on Wednesday.
It finally closed 7.5 per cent higher at $21.50 last night.
Yesterday’s issue of 112.8m shares at $20 a share raised $2.3bn for selling shareholders.
Blackstone has kept all of its 750.6m shares in the firm in the float to give it a 76.2 per cent controlling stake in the company worth about $16.4bn, based on yesterday’s close price.
The Wall Street firm originally stumped up about $5.7bn of equity to buy the company in 2007 for $19.7bn. It injected a further $819m in 2010 as part of a debt restructuring, pushing its equity stake on the deal to $6.5bn.
It means the company is sitting on a paper profit of $9.9bn, nudging close to the record $10.1bn made by Apollo from its 2008 sale of LyondellBasell Industries.
Blackstone borrowed about $20.6bn of debt to help buy the Hilton, which owns the iconic Waldorf Astoria hotel in New York.