Hilton Worldwide Raises Record $2.34bn In Stock Market Return

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By Jerin Mathew | December 12, 2013 10:47 PM EST

Hilton Hawaiian Village. (Hilton Worldwide)

US hotel operator Hilton Worldwide generated a record amount from its initial public offering, marking the company's return to public markets after it was taken private by Blackstone Group six years ago.

The world's biggest hotel operator raised $2.34bn (£1.4bn, €1.7bn) in its IPO, which was priced at $20 per share. The IPO price is the biggest ever generated by a hotel operator. Hilton and an existing shareholder sold 117.6 million shares in the IPO.

The offering was more than nine times oversubscribed, a person with knowledge of the matter told Bloomberg.

Hilton said it intends to use the net proceeds from the offering to repay about $1.25bn of term loan borrowings outstanding under its senior secured credit facilities.

Hilton had earlier confirmed that Blackstone or its affiliates are not selling any shares in the offering or receiving any proceeds.

The company's stock would trade on the New York Stock Exchange starting from 12 December under the ticker symbol 'HLT'.

Deutsche Bank AG, Goldman Sachs, Bank of America and Morgan Stanley assisted the hotel chain in the IPO.

Blackstone's Fortune

Hilton was founded in 1919 by Conrad Hilton. The company operates in 90 countries, has more than 4,000 hotels and 670,000 rooms under ten brands. The company itself owns or leases 157 hotels, including the famous Waldorf Astoria in New York and the Hilton Hawaiian Village.

The company's brands include Conrad, Waldorf Astoria, Doubletree, Embassy Suites, Homewood Suites, Home2Suites, Hilton Garden Inn, Hampton Inn, and Hilton Grand Vacations.

Private equity group Blackstone took the company private in October 2007, when global hotel industry was suffering from the global financial crisis. The deal was priced at $26.7bn, including debt. Blackstone refinanced about $13bn of the company's debt before the IPO.

Blackstone's existing 76.2% stake in Hilton is currently valued at about $15bn, which is more than 2 times its $6.4bn total investment in the hotel chain.

Blackstone is expected to benefit further from its Hilton investment, as the US hotel industry is projected to recover along with the economy with better room rates and occupancy levels in 2014.  

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