Hilton Worldwide’s IPO raises $2.35 billion

Published December 11, 2013 by Paula C. Squires

Hilton Worlwide Holdings Inc., based in McLean, raised $2.35 billion late Wednesday in its initial public offering in one of the largest IPOs of the year, surpassing Twitter’s $2.1 billion IPO in November.

The shares were priced at $20 each after the market's close Wednesday, and Blackstone and existing shareholders sold about 117.6 million shares. The company's shares began trading Thursday  on the New York Stock Exchange under the ticker symbol HLT. The company made a decent showing during its public debut, with the stock price closing at $21.50 by day's end, for an increase of 7.5 percent. Nearly 67 million shares  were traded.

Hilton Worldwide, which relocated its corporate headquarters from Beverly Hills., Calif., to McLean in 2010, has been expanding, primarily in international markets, after being purchased by the New York-based Blackstone Group for $26 billion in 2007.

International growth has been a hallmark under Hilton Worldwide CEO Chris Nassetta, whom Blackstone recruited shortly after buying Hilton.  The growth and a four-year rebound in hotel property values and hotel occupancies made for a dramatic turnaround following the credit crisis and a plunge in occupancy that followed shortly after the Great Recession in 2008.

Today's sales will indicate the public's appetite for  a piece of the hospitality company. Hilton manages and develops some of the top-known names in the hotel industry, including the Waldorf Astoria Hotels and Resorts.

Altogether, Hilton has more than 4,000 hotels in 90 countries with more than 600,000 rooms for rent.

Bloomberg reported Wednesday that Blackstone could make a paper profit of more than $8 billion as a result of the IPO, which would be one of the two largest private-equity profit deals ever. Blackstone plans to retain a 76 percent majority stake in the company and will use  some of the proceeds from the IPO to pay down about $1.2 billion in debt.