Blackstone eyeing Hilton IPO to exit $26bn debt-heavy buyout from 2007


Hilton hotelBlackstone Group is reportedly looking to exit one of the biggest private equity buyouts in history by re-floating legendary hotel group Hilton Worldwide on the stock market.

The firm has hired Deutsche Bank, Goldman Sachs, Bank of America and Morgan Stanley to run the IPO for the first half of 2014 according to Reuters, which cited three people with knowledge of the matter.

Blackstone took Hilton private in July 2007 for $26bn, with a whopping $20bn of that made up of bank debt and the remaining $6bn provided as equity from the private equity firm and its investors.

The firm managed to cut that debt by nearly $4bn through a restructuring in 2010, which also relaxed its maturity until November 2015.

Global financial trauma following the financial crisis hit the hotel industry hard, but a recovery appears to be under way if Hilton’s recent earnings are anything to go by.

The company’s EBITDA is forecast to be 58 per cent higher this year than in 2009 according to a presentation to Blackstone shareholders seen by Reuters.

Blackstone’s potential Hilton exit comes hot on the heels of news it is looking to sell its investment in budget hotel chain La Quinta Inns & Suites, which could be valued at $4.5bn.

The New York-based buyout major has hired JPMorgan Chase & Co and Morgan Stanley to explore a sale of La Quinta, but it is also open to floating the business according to Reuters, citing a person familiar with the matter.

Blackstone acquired the hotel chain in a $3.4bn take-private deal in 2006. It has since expanded the business via new site openings and bolt-on deals.

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