News for the Hospitality Executive
|BEVERLY HILLS, Calif. - July 3, 2007 - Hilton Hotels Corporation
(NYSE:HLT) announced today that it has entered into a definitive merger
agreement with The Blackstone Group’s (NYSE:BX) real estate and corporate
private equity funds in an all-cash transaction valued at approximately
$26 billion. Under the terms of the agreement, Blackstone will acquire
all the outstanding common stock of Hilton for $47.50 per share. The price
represents a premium of 40% over yesterday’s closing stock price.
Hilton’s Board of Directors approved the transaction today. It is anticipated that the transaction will close during the fourth quarter of 2007; completion is subject to the approval of Hilton’s shareholders, as well as other customary closing conditions. A special shareholders meeting will be scheduled at a later date.
The acquisition brings together a leading global hospitality company with Blackstone’s extensive portfolio of hotels and resorts.
Blackstone currently owns more than 100,000 hotel rooms in the U.S. and Europe, ranging from limited service properties such as La Quinta Inns and Suites to LXR Luxury Resorts and Hotels. The LXR collection includes such upscale properties as The Boulders Resort and Spa (Arizona), The El Conquistador Resort (Puerto Rico), The Boca Raton Resort and Club (Florida), The Golden Door Spa (San Diego), and The London NYC (New York). Blackstone’s holdings complement Hilton’s unparalleled family of brands, which include Hilton, Conrad Hotels & Resorts, Doubletree, Embassy Suites, Hampton Inn, Hilton Garden Inn, Hilton Grand Vacations, Homewood Suites by Hilton, and The Waldorf=Astoria Collection.
Blackstone intends to invest in the Hilton properties and brands globally to enhance and grow the business for the benefit of owners, franchisees and customers. Over the last fifteen years, Blackstone has been the largest private investor in hospitality worldwide and it has a strong track record of reinvesting in its hotel properties. Blackstone has invested approximately $1 billion in redevelopment capital in its LXR properties over the last three years; it has also grown the La Quinta brand by approximately 45% since its acquisition in January 2006.
Stephen F. Bollenbach, Hilton’s co-chairman and chief executive officer, said: “Our priority has always been to maximize shareholder value. Our Board of Directors concluded that this transaction provides compelling value for our shareholders with a significant premium. We are delighted that a company with the resources and reputation of Blackstone fully appreciates the value inherent in our global presence, strong brands, industry leading marketing and technology programs, and unique portfolio of hotel properties.”
Jonathan Gray, Senior Managing Director, Blackstone, commented, "It is hard to imagine a better strategic fit for us than Hilton with its world-class people, brands and network of hotels. This transaction is about building the premier global hospitality business. We are committed to investing in the company and working with Hilton's outstanding owners and franchisees to continue to grow and enhance the business."
Michael Chae, Senior Managing Director, Blackstone, added: “Blackstone’s real estate and corporate private equity funds collaborated on the acquisition of Hilton, demonstrating Blackstone’s unique ability to undertake such a transaction. We look forward to working with Hilton’s management team and employees to enhance the value of the company.”
Blackstone views Hilton as an important strategic investment; no significant divestitures are envisaged as a result of this transaction.
The transaction is not contingent on the receipt of financing. Financing commitments have been provided by Bear Stearns, Bank of America, Deutsche Bank, Morgan Stanley and Goldman Sachs. These institutions also served as financial advisors to Blackstone. Simpson Thacher & Bartlett LLP acted as legal advisor to Blackstone. UBS Investment Bank and Moelis Advisors acted as financial advisors to Hilton, and Sullivan & Cromwell LLP acted as legal advisor to Hilton.
Conference Call Information
Hilton Hotels Corporation will host a conference call with analysts Thursday, July 5th at 1:00 pm ET (10:00 am PT). To access, dial 877-273-3815 (domestic)/617-597-9368 (international) and enter passcode 89107020#.
The conference call will also be webcast simultaneously via Hilton’s investor relations website. Investors wishing to access the call on the web should log on to www.hiltonworldwide.com, click the investor relations tab and click on the conference call link.
A replay of the call will be available by telephone until Thursday, July 12th at 8:30 pm ET (5:30 pm PT). To access, dial 888-286-8010 (domestic)/617-801-6888 (international) and passcode 13299515. Additionally, a replay will be available indefinitely on Hiltonworldwide.com.
Hilton Hotels Corporation (NYSE:HLT) is the leading global hospitality company, with more than 2,800 hotels and 480,000 rooms in 76 countries and territories, including 100,000 team members worldwide.
The company owns, manages or franchises a hotel portfolio of some of the best known and highly regarded brands, including Hilton®, Conrad® Hotels & Resorts, Doubletree®, Embassy Suites Hotels®, Hampton Inn®, Hampton Inn & Suites®, Hilton Garden Inn®, Hilton Grand Vacations™, Homewood Suites by Hilton® and The Waldorf=Astoria Collection®.
The Blackstone Group (NYSE:BX) is a leading global alternative asset manager and provider of financial advisory services. Its alternative asset management businesses include the management of corporate private equity funds, real estate opportunity funds, funds of hedge funds, mezzanine funds, senior debt funds, proprietary hedge funds and closed-end mutual funds. The Blackstone Group also provides various financial advisory services, including mergers and acquisitions advisory, restructuring and reorganization advisory and fund placement services.
Forward Looking Statements
Additional Information and Where to Find It
Participants in the Solicitation
Hilton Hotels Corporation
|Also See:||Biggest Hotel Deal in History - Blackstone Buys Hilton for $26 billion / July 2007|
|The Blackstone Group Now Controls 1,430 Hotels; Some Speculate Blackstone Preparing an Initial Public Offering / February 2006|
|MeriStar Hospitality Agrees to be Acquired by The Blackstone Group in Transaction Valued at Approximately $2.6 billion / February 2006|
|The Lightstone Group to Acquire Extended Stay Hotels (683 properties) from the Blackstone Group for $8 Billion / April 2007|
|The Blackstone Group to Acquire Boca Resorts in Deal Valued at $1.25 billion, including Debt / October 2004|
|With Acquisition by Blackstone Group Complete, La Quinta Management LLC Plans to Focus on Corporate Owned Hotels, Will Convert About 100 Baymont Hotels to La Quinta and Sell Baymont Flag / March 2006|
|Blackstone Real Estate Advisors Combines 14 Wyndham Properties with Seven Other Owned Hotels to Form the LXR Luxury Resorts Brand / August 2005|