Hilton Hotels Corp said it had agreed to be acquired by the Blackstone Group LP for US$20.1 billion in cash.
The private equity group agreed on Tuesday to buy all outstanding Hilton shares for US$47.50 each, a 32 percent premium over the day's closing stock price.
The companies valued the deal at US$26 billion, including debt.
Hilton's board approved the terms on Tuesday. The company said the deal would close in the fourth quarter pending shareholder approval.
"Our board of directors concluded that this transaction provides compelling value for our shareholders with a significant premium," Stephen Bollenbach, Hilton's co-chairman and chief executive, said in a statement.
The acquisition would take Beverly Hills-based Hilton Hotels private and boost Blackstone's portfolio of lodging properties. Blackstone owns more than 100,000 hotel rooms in the US and Europe, including La Quinta Inns and Suites as well as LXR Luxury Resorts and Hotels.
Hilton Hotels owns or operates 2,800 hotels and 480,000 rooms in 76 countries and territories and includes such brands as Doubletree, Embassy Suites and Hampton Inn.
Among Hilton's premier hotels is the Waldorf-Astoria in New York.
Blackstone said it intends to invest heavily in Hilton and does not foresee any significant divestitures.
"It is hard to imagine a better strategic fit for us than Hilton with its world-class people, brands and network of hotels," said Jonathan Gray, senior managing director at Blackstone.
"We are committed to investing in the company and working with Hilton's outstanding owners and franchisees to continue to grow and enhance the business," Gray said.
Hilton recently announced that Matthew Hart, the firm's president and chief operating officer (COO), would succeed Bollenbach as president and CEO effective on Jan. 1. It was unclear whether Hart would remain with the company after the acquisition.
"Blackstone likes the management here," Bollenbach said. "Matt continues to be COO and our plans remain the same."
Hilton has been aggressively expanding since 2005, when it bought Britain's Hilton Group PLC for US$5.7 billion in cash, reuniting two brands that split in the 1960s. The deal allowed Hilton, which had been limited to properties in the US and Canada, to become a global player.
Last year, Hilton's revenue nearly doubled to US$8.16 billion and net income climbed 24 percent.
The company had raised its estimates this year for per-room revenue -- a key industry measure -- in a sign that its expansion plans were being matched by increased worldwide demand.
Hilton's plans for expansion, especially in new territories such as India, and the steady stream of fees the company gets for managing franchised properties worldwide, proved attractive to Blackstone, said Jonathan Galaviz, a partner at Globalysis Ltd, a Las Vegas-based consultancy.
"Blackstone feels those type of international expansion plans bode well for the long-term viability of Hilton as an asset," Galaviz said.
"I would expect to see continuing interest from private equity in travel and leisure sector assets as consumer disposable income increases in places like China and India and baby boomers here shift to the leisure part of their lives," he said.
The deal was praised by hotel workers union UNITE HERE.
"We enjoy a positive partnership with Hilton Hotels," union president Bruce Raynor said.
"Blackstone has demonstrated its commitment to fair treatment for thousands of hotel workers in several major markets," he said. "This combination is good news for the workers of what will be the largest hotel owner in the world."
UKRAINE, NVIDIA: The US leader said the subject of Russia’s war had come up ‘very strongly,’ while Jenson Huang was hoping that the conversation was good Chinese President Xi Jinping (習近平) and US President Donald Trump had differing takes following their meeting in Busan, South Korea, yesterday. Xi said that the two sides should complete follow-up work as soon as possible to deliver tangible results that would provide “peace of mind” to China, the US and the rest of the world, while Trump hailed the “great success” of the talks. The two discussed trade, including a deal to reduce tariffs slapped on China for its role in the fentanyl trade, as well as cooperation in ending the war in Ukraine, among other issues, but they did not mention
Japanese Prime Minister Sanae Takaichi yesterday lavished US President Donald Trump with praise and vows of a “golden age” of ties on his visit to Tokyo, before inking a deal with Washington aimed at securing critical minerals. Takaichi — Japan’s first female prime minister — pulled out all the stops for Trump in her opening test on the international stage and even announced that she would nominate him for a Nobel Peace Prize, the White House said. Trump has become increasingly focused on the Nobel since his return to power in January and claims to have ended several conflicts around the world,
GLOBAL PROJECT: Underseas cables ‘are the nervous system of democratic connectivity,’ which is under stress, Member of the European Parliament Rihards Kols said The government yesterday launched an initiative to promote global cooperation on improved security of undersea cables, following reported disruptions of such cables near Taiwan and around the world. The Management Initiative on International Undersea Cables aims to “bring together stakeholders, align standards, promote best practices and turn shared concerns into beneficial cooperation,” Minister of Foreign Affairs Lin Chia-lung (林佳龍) said at a seminar in Taipei. The project would be known as “RISK,” an acronym for risk mitigation, information sharing, systemic reform and knowledge building, he said at the seminar, titled “Taiwan-Europe Subsea Cable Security Cooperation Forum.” Taiwan sits at a vital junction on
LONG-HELD POSITION: Washington has repeatedly and clearly reiterated its support for Taiwan and its long-term policy, the Ministry of Foreign Affairs said US Secretary of State Marco Rubio yesterday said that Taiwan should not be concerned about being used as a bargaining chip in the ongoing US-China trade talks. “I don’t think you’re going to see some trade deal where, if what people are worried about is, we’re going to get some trade deal or we’re going to get favorable treatment on trade in exchange for walking away from Taiwan,” Rubio told reporters aboard his airplane traveling between Israel and Qatar en route to Asia. “No one is contemplating that,” Reuters quoted Rubio as saying. A US Treasury spokesman yesterday told reporters
RSS