Blackstone Group is checking out of Hilton Worldwide Holdings Inc.
The firm’s largest investor agreed to sell 15.8 million shares, valued at about $1.3 billion based on Thursday’s close, bringing to an end a 11-year relationship of highs and lows that ended up being widely regarded as the most-profitable private equity deal on record. Bloomberg News earlier disclosed the planned sale.
Blackstone took the hotel behemoth private in October 2007, investing $6.5 billion of equity from its real estate and private-equity funds as well as from co-investors in those funds. The investment was later written down by about 70 percent during the financial crisis and New York-based Blackstone put in more cash and restructured the debt before taking the company public again in December 2013. Since then, the lodging firm has more than doubled in value, according to data compiled by Bloomberg.
The firm has been gradually shedding its stake since 2014, and sold a 25 percent stake of the hotelier to HNA Group Inc. in March 2017. The Chinese firm — to combat deep indebtedness — recently sold its holdings. HNA made a profit of roughly $2 billion from its Hilton investment, Bloomberg News has previously reported.
Hilton’s strong performance has been driven by organic growth as well as some lucrative sales of real estate within its portfolio, including the sale of the Waldorf Astoria New York for $1.9 billion in 2015. Hilton also sought to create shareholder value by deciding to spin off its so-called owned-real estate unit Park Hotels & Resorts Inc. and its timeshare business Hilton Grand Vacations Inc.
Hilton is buying back 1.25 million of the shares that were owned by Blackstone.
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