Hilton IPO price range set at $18-$21 a share

on Dec 2, 2013
Updated: Oct 21, 2019
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iNVEZZ.com, Monday, December 2: Hilton Worldwide Holdings Inc, the world’s largest hotel operator, revealed today details about its upcoming initial public offering on the New York Stock Exchange (NYSE), saying it will offer 112.8 million shares, or about 11.6 percent of the company, at between $18 and $21 a share. Hilton is selling 64.1 million shares in the IPO, while the selling shareholder, Hilton Global Holdings LLC, is offering an additional 48.7 million shares, the company’s prospectus filed with the US Securities and Exchange Commission shows. If the underwriters exercise their option to purchase up to an additional 16.9 million shares from the selling stockholder, the total proceeds from the IPO will reach $2.72 billion, making it the largest hotel IPO on record so far. At a price of $21 per share, Hilton is valued at $23.4 billion, well above rivals Starwood Hotels & Resorts Worldwide Inc (NYSE:HOT) with a market capitalisation of $14.34 billion and Marriott International Inc. (NASDAQ:MAR) at $14.26 billion.

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Hilton said it plans to apply to list its shares on the NYSE under the symbol ‘HLT’, but the filing did not provide an expected date for the IPO launch. The hotel operator estimates the net proceeds from the IPO to be about $1.21 billion at the midpoint of the price range. It intends to use the net proceeds to repay debts.

Private equity firm Blackstone Group LP (NYSE:BX), which currently owns 81.5 percent of Hilton Worldwide, will not be selling any of its shares in the IPO, but its stake will fall to 76.2 percent after the issue of the new shares. Blackstone took Hilton private in October 2007 in a $26.7 billion deal that was one of the largest leveraged buyouts before the 2008 global financial crisis.

Hilton, which was established almost a century ago, has 4,080 hotels, resorts and timeshare properties comprising 671,926 rooms in 90 countries and territories worldwide. Growth potential in emerging markets like Asia and South America and hotel-management expertise help make Hilton attractive to investors, Arthur Adler, head of the Americas division of brokerage Jones Lang LaSalle’s hotels group, told Bloomberg.

Hilton posted a 2.2 percent growth in total revenues to $7.09 billion for the first nine months of this year. Its operating profit for the period rose 21 percent year-on-year to $1.01 billion, while net profit grew 34 percent to $389 million.
The lead underwriters on the IPO are Deutsche Bank, Goldman Sachs Group, Bank of America and Morgan Stanley, while 20 other investment banks will also underwrite the offering.
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