Wednesday, July 04, 2007

Blackstone buys Hilton

In recent years the private equity giant Blackstone Group has made significant investments in the hotel and commercial real estate industries by buying and taking private several large publicly-traded corporations.

Blackstone's latest purchase is the Hilton Hotels Corp for about $US26 billion .

Under the terms of the agreement, Blackstone will acquire all the outstanding common stock of Hilton for $US47.50 dollars a share.

The price represents a premium of 40 per cent over Monday's closing stock price.

Hilton Hotels stock closed up 6.44 per cent yesterday on the New York Stock Exchange at $US36.05.

Hilton's board of directors approved the transaction. It would be completed sometime during the fourth quarter of 2007, subject to the approval of Hilton's shareholders, the corporation said in a statement.

The proposed transaction "will deliver substantial value creation for our shareholders. In addition, a majority of the equity will be owned by Canadians", Blackstone chairman Richard Currie said.

Hilton is a company that took 40 years to be reunited as a single entity, following the $6bn merger of Hilton Hotels Corporation with its UK sister, Hilton Inter- national in 2005.

For the family of Conrad Hilton, the deal represents the culmination of a hotel empire growth story that has lasted nearly 90 years.

Blackstone's step into the public limelight marked a sea change for an industry that had closely guarded its secrecy. Blackstone was previously a wholly private partnership and as such under US laws not subject to the same scrutiny as public corporations.

Blackstone's IPO launch and the deal with Hilton Hotels mark a heady year for Blackstone.

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