Hilton Worldwide to raise $2.4 bn in biggest hotels IPO
03 Dec 2013
Hilton Worldwide Holdings Inc, the luxury hotels chain bought by Blackstone Group LP in 2007, plans to raise $2.4 billion in its US initial public offering, making it the biggest floatation by a hotel company.
Blackstone acquired Hilton for $26 billion in October 2007, as the biggest buyout boom in history was nearing its end.
The McLean, Virginia-based hotel operator and existing shareholders plan to sell 112.8 million shares, the company said in a regulatory filing. Hilton, the world's largest hotel company with over 4,000 properties plans to sell 64.1 million of the total, using its proceeds to help repay $1.25 billion of debt.
According to New York-based Blackstone it would not sell any of its stock.
Hilton would be taken public even as the chain refinanced about $13 billion of debt, capitalising on US stock prices at near record levels and a rebound in hotel occupancies and rates.
The past six years have seen Hilton chief executive officer Christopher Nassetta increase the number of rooms by 34 per cent, most of them overseas and in franchised and managed hotels, which required almost no capital investment.
According to its regulatory filing, the offering of 112.8 million shares was expected to be priced between $18 and $21 each and Hilton was offering around 64.1 million shares, while selling shareholders were tendering 48.7 million shares. Sale of additional shares to banks could put the proceeds of the IPO at as much as $2.72 billion.
The IPO comes as the IPO market heats up and the hotel industry starting to recover over the past two years from its mauling during the recession. Roughly 200 companies had gone public in 2013 with markets hitting record highs.
If it was priced above the middle of the expected range, Hilton would have the second- or third-largest IPO this year in the US, overtaking Twitter's $2.1 billion haul last month.
It would trail oil and gas pipeline company Plains GP Holdings LP, which raised $2.9 billion in October.
(See: Hilton Worldwide close to launching IPO)