Wall Street Journal has reported that Hilton Worldwide could be returning to the stock market, with banks apparently being selected to manage a share sale.
Hilton, taken private by Blackstone Group in 2007 for more than $18 billion and $7 billion in assumed debt in the hotel industry’s largest-ever private-equity buyout, and an IPO would represent a major comeback for Hilton.
The chain has struggled under the debts taken on in Blackstone’s buyout, which was succeeded by the financial crisis and recession affecting business.
However, Blackstone successfully restructured Hilton’s debt load, and the hotel chain now is performing better with both hotel occupancy and room rates improving and – a significant factor – as the commercial property market recovers.
Timing and value
It is unclear what kind of valuation Blackstone would seek or how much of its stake it would sell, though an IPO could be launched early in 2014. Depending on the size of the stake for sale, the deal could be ‘multi-billion dollar’.
The management team at Hilton has been aggressively expanding the brand, especially abroad where it has introduced lower-cost, limited-service brands like Homewood Suites and Hampton Inns.
Under Blackstone, the number of hotels that Hilton owns, operates or franchises has grown to over 4,000.
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