Wed, Dec 04, 2013 - Page 15 News List

Hilton sets terms of one of biggest IPOs

AP, NEW YORK

The Hilton Midtown is pictured in New York on June 7.

Photo: Reuters

Hilton Worldwide Holdings Inc on Monday said the company plans to sell stock worth an estimated US$2.2 billion in its initial public offering (IPO), making its return to the public markets one of the year’s biggest IPOs.

The hotel operator disclosed in a regulatory filing that the offering of 112.8 million shares is expected to price between US$18 and US$21 each. Hilton is offering about 64.1 million shares, and selling shareholders are offering another 48.7 million shares.

Assuming shares price in the middle of that range, Hilton anticipates net proceeds of about US$1.21 billion, which it plans to use to repay debt.

That price would give the McLean, Virginia-based company a value of about $19.2 billion.

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, the filing said.

The recession began soon after Blackstone bought Hilton. Hotel operators were hurt due to 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.

The IPO also comes during a bumper crop of new public listings. About 200 companies have gone public this year, as the markets have hit record highs. The benchmark S&P 500 index has jumped more than 26 percent this year.

Some other standout IPOs include Twitter, which raised about US$1.8 billion; energy company Plains GP Holdings LP, which raised about US$2.8 billion; and Zoetis, a spinoff from Pfizer, which raised US$2.2 billion.

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.

The stock is expected to list on the New York Stock Exchange under the symbol “HLT.”

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