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Hilton prices US$2.4 billion IPO as hotel industry turns around

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December 3, 2013

Hilton prices US$2.4 billion IPO as hotel industry turns around

Hilton was taken private by The Blackstone Group in October 2007. Photo- ReutersHilton Worldwide said on Monday it could raise as much as US$2.37 billion, making it one of the year?s biggest US initial public offerings.

The hotel operator said in a regulatory filing the 112.8 million shares are expected to price between US$18 and US$21 each.

Hilton is offering about 64.1 million shares, and shareholders are offering 48.7 million shares. Selling additional shares to banks could put the IPO?s proceeds at as much as US$2.72 billion.

The IPO comes as the hotel industry has started to recover over the past two years from its battering during the recession and as the market for new listings heats up.

Roughly 200 companies have gone public this year as markets hit record highs.

If it prices above the middle of the expected range, Hilton will have the second- or third-largest IPO this year in the United States, surpassing Twitter?s US$2.1 billion haul last month.

Hilton was taken private by The Blackstone Group, an investment firm, in October 2007 for US$20 billion. Blackstone will still own a majority of the voting power of shares eligible to vote in the election of board members, according to the filing.

The recession began soon after Blackstone bought Hilton. Hotel operators were hurt by a drop in business travel, fewer vacationers, falling real estate prices and a general oversupply in the US market.

In the past two years, the industry has started to turn around as business travel is improving and room rates are rising.

Hilton has 4,080 hotels, resorts and timeshare properties. Its brands include Hilton Hotels & Resorts, Waldorf Astoria Hotels & Resorts, and Hampton Inn. The company?s properties range from full-service hotels and properties that provide a limited amount of specific services to luxury resorts and a timeshare brand.

Source South China Morning Post, http://www.scmp.com/business/companies/article/1371665/hilton-prices-us24-billion-ipo-hotel-industry-turns-around

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