Hilton, Owned By Blackstone, To Go Public Week of December 2

Hilton Worldwide, owned by the Private Equity firm Blackstone Group L.P. (BX), may issue Initial Public offering (IPO) week of December 2, says a report from Reuters citing sources familiar with the development.

Blackstone hoping $30 billion value

Regulatory review over the IPO filing is ongoing, and a possibility of a change in the timing of issue cannot be ignored. Sources preferred to be under cover as the date of IPO has not yet been disclosed, says Reuters.

Hilton was acquired by Blackstone Group, in 2007, for $26.7 billion, in a deal that is noted down as one of the largest leveraged buyouts before 2008 financial fall down. Hilton filed for an IPO in September to raise $1.25 billion. Blackstone is expecting the stock market to value Hilton around $30 billion, sources told Reuters.

The Blackstone Group is looking forward to withdraw from various real estate investments. Another hotel chain owned by Blackstone, Extended stay America Inc is also expected to go public and can fetch a market value of $4.2 billion. Further, Blackstone is planning to sell or take public the hotel chain La Quinta public, which could value upto $4.5 billion.

Deutsche Bank, Goldman Sachs (GS), BofA Merrill Lynch and Morgan Stanley (MS) are the lead underwriters on the Hilton offering.

Right time for IPO

The hotel operator was founded by Conrad Hilton in 1919, and now includes world famous brands like Conrad and Waldorf Astoria. Hilton has 4,041 hotels or 665,667 rooms spread in 90 countries. Apart from this it owns or leases 157 hotels along with Waldorf Astoria in New York and the Hilton Hawaiian Village.

Blackstone’s real estate star, Jonathan Gray is one who carried forward almost all hotel deals for the firm in the last 15 years. Real estate segment lead by Gray is the biggest and most profitable business at Blackstone, and IPO of Hilton will only mean upside for Gray.

Number of rooms in Hilton surged 34% or 170,000 since Blackstone acquired the hotel chain, the highest increase for any hotel company. For the first half of 2013, revenue of Hilton surged 2.7% to $4.64 billion from the previous year, and profit increased 66% to $189 million.