Hilton may be back as a public company, perhaps sooner rather than later. There have been many media reports around this on Thursday, but as your money matters to us we think this is one coming IPO that you really need to watch. You have to go back to mid-2007, which was at the end of the private equity boom, to when The Blackstone Group LP (NYSE: BX) reached a deal to acquire Hilton Hotels Corp. in a deal valued at almost $20 billion. It was valued even higher if you include the debt.
Source: Jon Ogg
Blackstone’s portfolios website shows that its total buyout price was $26.9 billion back in October 2007. That puts this as one of the top ten largest private equity buyouts.
Again, if you are an IPO watcher looking at new ideas, then this IPO will be one to watch. When Hilton was bought out it had somewhere around 2,800 hotels and about 480,000 hotel rooms under its various hotel brands. It is even larger now. The Blackstone portfolio companies site said that Hilton has nearly 3,500 hotels totaling over 575,000 rooms in 79 countries under brands like Hilton, Waldorf Astoria, Doubletree, Embassy Suites, Hilton Garden Inn, Hampton Inn, Conrad, Homewood Suites, Home2, and Hilton Grand Vacations.
The Wall Street Journal noted on Thursday that Deutsche Bank, Goldman Sachs, Merrill Lynch, and Morgan Stanley will be leading the underwriting group. Until we see the formal tombstone with the SEC, we will not dwell on which firms are getting in on the deal nor why. That being said, you know that it has to be the bulge bracket firms getting in on the deal. After all, bringing out even 25% of a $20 billion company to market all at once from a private equity sell-out is no easy task and it requires many clients to accommodate that.
The reason we think that you have to watch this closely is because it was one of the largest private equity buyouts ever. We won’t judge whether or not it will be a good IPO or bad IPO until we get much closer, particularly since no updated financials are there. Either way, this will be one big IPO to watch.
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