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Hilton Gets Closer to Its Mega IPO

The company plans to list on the NYSE under the ticker of “HLT”


Hilton Worldwide filed an amended S-1, which set the proposed ticker as “HLT.” The company plans to list on the NYSE, and the deal is expected to come onto the market in late December. The underwriters include Deutsche Bank (DB), Goldman Sachs (GS), BofA Merrill Lynch (BAC) and Morgan Stanley (MS).

The IPO will be a big achievement for its owner, The Blackstone Group (BX). The firm took HLT private in a $26 billion transaction in 2007. However, because of the financial crisis and brutal recession, BX had to engage in tough cost cutting as well as restructuring of the debt.

Another key to the turnaround was to focus more on franchising — the company has other brands like Waldorf Astoria and Embassy Suites — which tends to be light on capital. BX also brought in a new CEO, Christopher Nassetta, and a variety of senior executives.

But the measures have paid off, as the hotel industry has made a nice comeback. Just look at the performance of top companies in the sector. For the year so far, the shares of Starwood Hotels & Resorts Worldwide (HOT) are up 29% and Marriott International (MAR) has posted a gain of 26%. There was also the recent public offering of Extended Stay America (STAY), which has increased 19% since mid-November. In fact, STAY was another company backed by BX.

As for the Hilton offering, it looks like the company will raise about $2.25 billion. If so, it would be the third largest deal for 2013 — behind Plains GP Holdings (PAGP) and Zoetis (ZTS) — even bigger than Twitter’s (TWTR) transaction.

Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO StrategiesAll About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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