Blackstone targeting $1.25bn IPO for Hilton
Hilton Worldwide filed for an initial public offering of up to $1.25bn (€939m) as owner Blackstone Group seeks to take advantage of a reviving hotel industry.
Blackstone took Hilton private in 2007 in a $26.7bn deal, one of the largest leveraged buyouts that preceded the 2008 global financial crisis.
The US hotel industry has been steadily improving as more people travel and businesses recover, allowing hotels to increase prices.
Hilton's adjusted earnings before interest, tax, depreciation and amortisation increased 12pc to $1.96bn in 2012.
"Given their 2012 EBITDA of about $2bn, Hilton should have an enterprise value of roughly about $26bn to $27bn," Ryan Meliker a senior analyst with MLV said.
That would make Hilton the biggest hotel chain in the world by market value.
Patrick Scholes, an analyst with Suntrust Robinson Humphrey, expects Hilton shares to trade around the same multiples as Marriott International Inc and Starwood Hotels and Resorts.
The Dow Jones US Hotels index has risen 18pc this year. Marriott's stock is up 15pc, while Starwood is up about 20pc.
Hilton Worldwide has about 4,000 hotels, resorts and timeshare properties, comprising 665,667 rooms in 90 countries and territories.
The Hilton IPO is the second hotel offering for Blackstone this year. In July, it filed with regulators to take Extended Stay America Inc public.
According to data from Smith Travel Research Inc, which tracks hotel industry data, revenue per available room (RevPAR) has increased about 6.9pc over the past three years in the Americas and demand has returned to pre-economic crisis levels. (Reuters)