Monday 20 August 2018

Blackstone checks out of Hilton Worldwide hotel group

The hotel chain’s largest investor is to sell 15.8m shares, with a value of €1.1bn
The hotel chain’s largest investor is to sell 15.8m shares, with a value of €1.1bn

Gillian Tan and Ellie Donnelly

Blackstone Group is checking out of Hilton Worldwide Holdings. The hotel chain's largest investor agreed to sell 15.8m shares, valued at about $1.3bn (€1.1bn) based on Thursday's close.

The sale brings to an end a 11-year investment relationship of highs and lows that ended up being widely regarded as the most-profitable large private equity deal on record.

Blackstone took the hotel behemoth private in October 2007, investing $6.5bn of equity from its real estate and private-equity funds as well as from co-investors in those funds.

The investment was later written down by about 70pc during the financial crisis and New York-based Blackstone had to put in more cash and restructured the debt before taking the company public again in December 2013.

Since then, the hotel chain has more than doubled in value, according to data compiled by Bloomberg.

The firm has been gradually shedding its stake since 2014, and sold a 25pc stake of the hotelier to HNA Group in March 2017.

The Chinese firm - to combat deep indebtedness - recently sold its holdings.

HNA made a profit of roughly $2bn from its Hilton investment, Bloomberg News has previously reported.

Hilton's strong performance has been driven by organic growth as well as some lucrative sales of real estate within its portfolio, including the sale of Manhattan's iconic Waldorf Astoria New York for $1.9bn in 2015.

Hilton also sought to create shareholder value by deciding to spin off its so-called owned- real estate unit Park Hotels & Resorts and its timeshare business, Hilton Grand Vacations.

Hilton is buying back 1.25m of the shares that were owned by Blackstone.

Hilton operates a number of properties in Ireland, and Blackstone invested in hotels here after the crash.

The group bought the former Burlington Hotel in Dublin 4 for €67m in 2012, trading it under the DoubleTree by Hilton brand and then selling the property for around €180m to German asset manager DekaBank.

Having invested approximately €20m in the refurbishment of the hotel, Blackstone still doubled its money on the Burlington deal. (Additional reporting Bloomberg)

Irish Independent

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