After 11 Years, Blackstone Exits Hilton Hotels

By Mark Hardie (Markyboy81) from Edinburgh, Scotland (Flickr) via Wikimedia Commons

After retaining an interest in Hilton Worldwide for almost 11 years, Blackstone Group, a private equity firm, has decided to check out of the hotel chain operator by selling its stakes amounting to approximately 5.8 percent.

Based on the Thursday close of Hilton at $83.30, The sale of the 15.8 million shares would generate approximately $1.32bn (£980m).

Hilton said that it will not receive any proceeds from the sale and would repurchase around 1.3 million shares from the shareholders who are affiliated to Blackstone.

Blackstone took the company that is based in Virginia public in 2013. It began shedding its stake a year later.

In June and November 2014, Blackstone raised around $2.33bn and $2.59bn, respectively, from sales of stocks that progressively decreased the firm’s stake in Hilton.

In 2015, Blackstone reduced its stake to below 50 percent in a $2.69bn stock sale, which was then called as the biggest ever selldown by a private equity sponsor via a block trade.

Usually, Blackstone purchases hotels and other real estate holdings at a discount, fixes them and sells them for a profit. The private equity company had taken Hilton private in a leveraged buyout amounting to $26bn in 2007.

In 2016, Blackstone agreed to sell a 25 percent stake in Hilton to the HNA Group of China for $6.5bn, three times of what it paid in 2007.

A heavily indebted aviation-to-financials conglomerate, HNA, sold the stake around a year and a half later as part of its plan to drop assets and take on a cash crunch.

Up to the close last Thursday, the shares of Hilton had risen around 36 percent in the last year.