Hilton Hotels Worldwide announced
in an SEC filing this morningthat it will seek to raise up to $US2.4 billion in an initial public offering.
The company is setting an IPO stock price range of $US18-$20 a share.
That means, more than anything, a major pay day for private equity firm Blackstone. Blackstone bought 81.5% of Hilton in a $US26 billion deal back in 2007. Blackstone itself put in $US6 billion of equity for the deal.
If the stock price settles on a midpoint of $US19.50 a share, Hilton will be worth $US19.2 billion with Blackstone’s 76.2% stake valued at $US14.6 billion. Blackstone does not plan on selling any of its stake.
Not back for an investment that, during points of the recession, it lost 70% of its value.
It’s been a solid turn around. In 2012, the company posted a net income of $US352 million, up 39% from the year before. Blackstone and Hilton’s CEO Chris Nasetta, who owns 7.6 million shares (about 0.008% of the company) increased the number of open rooms around the world by 34% since Blackstone’ s investment.
Bloomberg reports that revenue per available room will increase by 5.7% to 6% next year too, according to STR, a Hendersonville, Tennessee-based lodging data provider.So who else will make loads of cash off this IPO?
Hilton Global Holdings owns 7.1% of the company right now, but unless they purchase additional shares, they’ll end up with only 1.7% of the company after the deal is done. That’s about 16,923,076 shares valued at about $US330 million if Hilton IPOs at the midpoint of its range.
Nasetta’s 7.6 million shares are valued at around $US148 million if Hilton IPOs at the midpoint of its range.The filing lists about 14 others with significant holdings less than Nasseta’s.
About 16 additional directors, execs, and director nominees will own a 1.3% stake of the company worth $US252 million at the midpoint of the IPO range.
Singpore’s sovereign wealth fund, the Government of Singapore Investment Corporation, owns 49.5 million shares which are worth $US965 million at the midpoint of the IPO range, according to Bloomberg.
It’s important to remember, amid all this high -fiving, that some of this cash will be used to pay off the $US1.25 billion in debt Hilton has racked up.
Don’t let that ruin the fun though.