Blackstone acquires Hilton Hotels for $26 billion

04 July 2007

In a record acquisition for the global hotel industry, US private equity firm Blackstone Group LP, has bought out the Hilton Hotels Corp, for about $26-billion in cash. Hilton''s 2006 net income was $572 million on revenue of $8.16 billion.

Blackstone will pay $47.50 for each Hilton share, a 32-per cent premium over Tuesday''s closing price. The PE firm is not revealing the debt and equity portion of the deal at this stage.

Bear Stearns, Bank of America Corp., Deutsche Bank AG, Morgan Stanley and Goldman, all of which served as financial advisers to Blackstone, provided financing pledges for the Hilton deal.

The Hilton is the world''s largest hotel group by number of properties, though the Intercontinental Hotels Group is the larger in terms of the number of rooms. In the US Hilton is the second largest hotel chain after Marriott International Inc.

The deal comes two years after Hilton Hotels Corporation merged with Hilton International, its sister company in the UK, in a $6-billion deal that split off Ladbrokes, the UK bookmaker, into a stand-alone company.

Hilton''s brands include Hilton, Conrad Hotels & Resorts, Doubletree, Embassy Suites, Hampton Inn, Hilton Garden Inn, Hilton Grand Vacations, Homewood Suites by Hilton, and The Waldorf-Astoria Collection.