Hilton Worldwide Holdings Inc (HLT) Rose 7 Percent In Its NYSE Debut

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Hilton Worldwide Holdings Inc (HLT) Rose 7 Percent In Its NYSE Debut

Hilton Worldwide Holdings Inc (NYSE:HLT) shares rose 7% in their NYSE Euronext (NYSE:NYX) debut on Thursday.

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The world’s largest hotel operator’s shares opened at $21.30 after Blackstone Group LP company raised over $2.3 billion in the year’s-second biggest IPO.

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Hilton in largest ever IPO

Earlier this month, Hilton Worldwide Holdings Inc (NYSE:HLT) in its regulatory filing indicated that it would price shares between $18 and $21 each. At the higher end of its price range, the hotel chain would be valued at about $32.5 billion including debt.

However, Hilton Worldwide Holdings Inc (NYSE:HLT) priced its initial public offering at $20 a share. The IPO which will raise $2.35 billion from the sale of 117.6 million shares, priced near the top end of the pricing range after drawing interest from a wide range of investors. Hilton increased the size of the deal by about 4% over the 112.8 million projected in a regulatory filing. The deal is the largest ever hotel IPO.

Blackstone’s control over Hilton

The Blackstone Group L.P. (NYSE:BX) took control of the world’s largest hotel chain in 2007 for over $18 billion. Furthermore, The Blackstone Group also assumed $7 billion in debt, making it one of the hotel industry’s largest-ever debt-fueled takeovers. The private-equity owner looks to take advantage of the rebounding commercial real estate market by floating the IPO.

Around 150 clients of Ireland’s biggest stockbrokers, Davy, put $100 million into The Blackstone Group L.P. (NYSE:BX)’s buyout of Hilton Hotels in 2007.

The hotel chain’s origin dates back to 1919, and today the company offers lodging under brands including Waldorf Astoria, DoubleTree, Homewood Suites and Hampton Inn.

During the last six years, The Blackstone Group L.P. (NYSE:BX) has managed to turn Hilton around, making it a dominant force in the global hotel market. During 2012, its revenue stood at $9.3 billion, up by 15% from 2010.

Strong response

According to Dunstan Prial of Fox Business, in two signs of strong demand, the number of shares sold to the public were boosted late Wednesday from about 112 million. Hilton Worldwide Holdings Inc (NYSE:HLT) also moved the IPO up one day, showing an indication that the deal’s underwriters were easily selling the stock. Hilton indicated that it will use some of the proceeds to pay down $1.25 billion in debt.

Six leading Wall Street investment banks, Goldman Sachs Group Inc (NYSE:GS), Bank of America Corp (NYSE:BAC)’s Merrill Lynch unit, Morgan Stanley (NYSE:MS), Wells Fargo & Co (NYSE:WFC), JPMorgan Chase & Co. (NYSE:JPM) and Deutsche Bank AG (NYSE:DB) (ETR:DBK) managed the deal.

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Mani is a Senior Financial Consultant. He has worked in Senior Management role in large banking, financial and information technology organizations. He has provided solutions for major banking and securities firms across the globe in the area of retail, corporate and investment banking. He holds MBA (Finance) and Professional Management Accounting Qualifications. His hobbies are tracking global financial developments and watching sports
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