Hilton to raise up to $2.37 billion in IPO

Monday 02 December 2013 14.48
Hilton Worldwide set for the world's biggest ever hotel IPO
Hilton Worldwide set for the world's biggest ever hotel IPO

Hilton Worldwide has said its initial public offering would raise up to $2.37 billion, in what would be the biggest-ever hotel IPO and perhaps the second-biggest IPO of the year.

Hilton, controlled by private equity firm Blackstone Group, would be valued at about $20.7 billion at the high end of the expected price range for its shares.

The company did not say whether it would launch its IPO before the end of the year. But if it does, it would be the second-biggest IPO of 2013 after oil pipeline holding company Plains GP Holdings, which raised $2.82 billion.

Blackstone took Hilton private in 2007 in a $26.7 billion deal that was one of the largest leveraged buyouts before the 2008 global financial crisis.

Hyatt Hotels raised about $950m in 2009 in the biggest hotel IPO while another Blackstone-backed hotel company, Extended Stay America, raised about $565m last month.

Blackstone, which is not directly selling any of its shares, will hold 76.2% of Hilton after the IPO.

Hilton expects to price the offering of 112.8 million shares at between $18 and $21 per share, according to a filing with the US Securities and Exchange Commission today. The offering represents about 11.5% of the company.

Hilton is selling 64.1 million shares in the offering, raising about $1.3 billion at the top end of the price range. Shareholders will offer the remaining 48.7 million shares.

The company said it would use the proceeds from the offering to repay $1.25 billion of debt.

Founded in 1919 by Conrad Hilton, Hilton's brands include such high-end names as Conrad and Waldorf Astoria. Hilton, which operates in 90 countries, has 4,041 hotels, or 665,667 rooms, under its umbrella.

The company itself owns or leases 157 hotels, including the Waldorf Astoria in New York and the Hilton Hawaiian Village.

Blackstone's plans for an IPO of Hilton come as private equity firms sell or list assets to take advantage of a surging IPO market that has been spurred by a market rally and low interest rates that have encouraged investors to buy stocks.

Blackstone also plans an IPO of hotel chain La Quinta, sources told Reuters last week. 

Keywords: ipo, hilton hotels