Blackstone buys Hilton for $26bn
London, July 4, 2007
US private equity group Blackstone is buying the global Hilton Hotels chain for $26bn (£13 billion) in an all-cash deal.
Under the deal, Blackstone is paying $47.50 for each Hilton Hotels Corporation share, a 32 per cent premium over their closing price on Tuesday.
Blackstone said the deal had been approved by Hilton's board, and was due to be completed by the end of 2007.
The surprise announcement comes two weeks after Blackstone raised $4.13 billion through floating a 13.2 per cent stake.
Private equity firms are investment companies that raise money from private sources rather than by using the stock market.
They typically buy up businesses they believe can fare better, with a view to improving their performances and eventually, selling them on for a profit.
Blackstone said it intends to grow the Hilton business.
The private equity firm already has a number of hotel investments, including La Quinta Inns and Luxury Resorts and Hotels.
US-based Hilton's other brands include Conrad Hotels, and the Waldorf-Astoria Collection.
Blackstone's co-founders, Stephen Schwarzman, 60, and Peter Peterson, 81, earned more than $2.4 billio between them from last month's share sale.
Hilton said the deal would be good news for its shareholders.
'Our priority has always been to maximize shareholder value. [The deal] provides compelling value for our shareholders with a significant premium,' said Hilton co-chairman and chief executive officer, Stephen Bollenbach.
The global network of Hilton hotels were reunited as one company in 2006 after a 42-year split.
The reunion happened after Hilton Hotels Corporation (HHC) paid $3.3 billion to buy the 400 international Hilton hotels owned by UK-based Hilton Group.
The division took place in 1964, when HHC sold off all its overseas hotels to concentrate on the US market.
Tags: Hilton Hotels |