The hotel operator said in a regulatory filing that the offering of
112.8 million shares is expected to price between $18 and $21 each.
Hilton is offering about 64.1 million shares, and selling
shareholders are offering 48.7 million shares. Selling additional
shares to banks could put the IPO's proceeds at as much as $2.72
The initial public offering comes as the hotel industry has started
to recover over the past two years from its battering during the
recession and as the IPO market heats up. Roughly 200 companies have
gone public in 2013 as markets hit record highs.
If it prices above the middle of the expected range, Hilton will
have the second- or third-largest IPO this year in the U.S.,
surpassing Twitter's $2.1 billion haul last month. It would trail
oil and gas pipeline company Plains GP Holdings LP, which raised
$2.9 billion in October. Depending on where it prices and if bankers
buy up Hilton's extra stock, it could also best Pfizer's spinoff,
Zoetis, which raised $2.6 billion in January.
But assuming shares price at $19.50, the middle of the range, Hilton
anticipates net proceeds of about $1.21 billion, which it plans to
use to repay debt. That price would give the McLean, Va.-based
company a value of about $19.2 billion.
Hilton was taken private by The Blackstone Group, an investment
firm, in October 2007 for $20 billion. Blackstone will still own a
majority of the voting power of shares eligible to vote in the
election of board members, according to the filing.
The recession began soon after Blackstone bought Hilton. Hotel
operators were hurt by a drop in business travel, fewer vacationers,
falling real estate prices and a general oversupply in the U.S.
market. In the past two years, the industry has started to turn
around as business travel is improving and room rates are rising.
[to top of second column]
Hilton has 4,080 hotels, resorts and timeshare properties. Its
brands include Hilton Hotels & Resorts, Waldorf Astoria Hotels &
Resorts, and Hampton Inn. The company's properties range from
full-service hotels and properties that provide a limited amount of
specific services to luxury resorts and a timeshare brand.
The company's history dates back nearly a century. Company founder
Conrad Hilton purchased his first hotel, the Mobley Hotel in Cisco,
Texas, in 1919. The first hotel to have the Hilton name was built in
Dallas in 1925. Hilton says that the pina colada cocktail was
invented at the Caribe Hilton in Puerto Rico in 1954. Its franchise
program was launched in 1965, and in 1971 John Lennon handwrote the
lyrics to "Imagine" on a piece of New York Hilton stationery while
at the hotel.
In 1975 the Muppet characters Statler and Waldorf were introduced,
named after two Hilton properties in New York. The HHonors guest
loyalty program debuted in 1987 — it now has 39 million members. The
company's website, hilton.com, launched in 1995, followed by its
first smartphone app in 2009.
The stock is expected to list on the New York Stock Exchange under
the symbol "HLT."
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