Hotel operator Hilton Worldwide raised $2.34 billion in its IPO, returning to the public markets some six years after Blackstone Group took it private in one of the largest deals of the leveraged buyout boom.
The payoff surpasses the $2.1 billion generated by Twitter’s IPO last month. If the banks involved buy the extra shares in the deal — the overallotment — it will be the second-biggest IPO of the year, behind Plains GP Holdings at $2.9 billion.
Hilton, whose brands include such high-end names as Conrad and Waldorf Astoria, priced its shares at $20 on Wednesday, within the expected range, and gave the world’s largest hotel operator an equity value of $19.7 billion. The stock will begin trading on the New York Stock Exchange on Thursday.
Blackstone took Hilton private in 2007 for $26.7 billion, including debt, at the height of the market. The financial crisis hit soon after, leaving the company facing a large debt pile due to the leveraged buyout and a recession that hit business. Blackstone refinanced about $13 billion of the hotel chain's debt before launching the IPO.
It also plans to use the proceeds from the offering to repay $1.25 billion in debt.
“Blackstone must be wiping their brow knowing that the company had a label since they bought it at the top [of the market],” said David Menlow, president of IPO research firm IPO Financial Network. “Even with the markets changing the way they have, it’s been a beneficial outcome for them.”
Fortum sells Finnish power grid for $3.5 bn
State-controlled Finnish utility Fortum has agreed to sell its local power distribution grid to a consortium of institutional investors led by First State Investments and Borealis Infrastructure for 2.55 billion euros ($3.5 billion). The price it got for the grid exceeds expectations and it is looking to sell its Swedish and Norwegian networks.