Hilton Hotels, one of the biggest hotel chains in the world, has agreed to be taken private by US private equity firm Blackstone in an all-cash deal valued at $26 bn (EUR 19 bn). Blackstone is offering $47.50 per share for the hotel chain, which has more than 2,800 hotel sites across 76 countries. The offer represents a premium of 32% over Hilton shares' closing price on Tuesday.
Hilton Hotels, one of the biggest hotel chains in the world, has agreed to be taken private by US private equity firm Blackstone in an all-cash deal valued at $26 bn (EUR 19 bn). Blackstone is offering $47.50 per share for the hotel chain, which has more than 2,800 hotel sites across 76 countries. The offer represents a premium of 32% over Hilton shares' closing price on Tuesday.
This is the biggest buyout of a hotel company ever, much higher than the $15 bn takeover of ITT by Starwood Hotel & Resorts back in 1998. The move is just the latest of a string of hotel deals completed this year by private-equity firms, which are seeking to take advantage of the hotel chains' consistent cash flow and real estate holdings. Earlier this year Blackstone, already owner of La Quinta chain, bought the German Deutsche Inter Hotels for EUR 720 mln. And just three weeks ago, another private-equity firm, Quinlan Private, snapped up the Jurys Inn hotel chain for almost EUR 1.2 bn, after spending another EUR 1.1 bn last April to buy 47 Marriott hotels with Israel's Ahouvi group.
Blackstone, the world's biggest hotel landlord with 100,000 hotel rooms in the US and Europe, expects to close the new transaction by the end of this year. The company, which raised $4.1 bn last month in an IPO, said in a statement that 'it intends to invest in the Hilton properties and brands globally.' Blackstone added it is not planning to make any 'significant' real estate sales as part of the purchase.
Jonathan Gray, senior managing director at Blackstone, said: 'It is hard to imagine a better strategic fit for us than Hilton with its world-class people, brands and network of hotels. This transaction is about building the premier global hospitality business.'
Financial pledges for the deal have been provided by Bear Stearns, Bank of America, Deutsche Bank, Morgan Stanley and Goldman Sachs, all of which served as financial advisors to Blackstone. Simpson Thacher & Bartlett acted as legal advisor to Blackstone. UBS Investment Bank and Moelis Advisors acted as financial advisors to Hilton, while Sullivan & Cromwell LLP acted as legal advisor to Hilton.
