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Hilton Looks For a King-Sized $2.4 Billion IPO

Hilton Worldwide has set the initial terms on its public offering, according to its recent S-1 filing. The company plans to offer 112.8 million shares at a range of $18-$21 per share. Assuming the deal is price at the high end, the company will bring in a haul of about $2.4 billion — making it the largest hotel offering in U.S. history.

Hilton plans to list its shares on the NYSE under the symbol of “HLT,” and the lead underwriters include Deutsche Bank (DB), Goldman Sachs (GS), BofA Merrill Lynch (BAC), Morgan Stanley (MS), J.P. Morgan (JPM) and Wells Fargo Securities (WFC).

The company went private back in 2007 — at the height of the private equity boom — in a mega $26 billion deal, with the help of The Blackstone Group (BX). Unfortunately, the timing was awful as the U.S. economy soon went into a deep recession because of the financial crisis.

But BX acted swiftly to restructure the operations. Of course, costs were slashed, but Blackstone also unloaded assets and shifted focus to a franchise model (the company has an assortment of brands like Waldorf Astoria, DoubleTree, Homewood Suites and Hampton Inn). BX also restructured its massive debt load, which turned out to be easier with interest rates at historic lows.

As of now, Hilton is looks like a new company — and it’s poised for a standout IPO. For the first nine months of 2013, Hilton’s revenues climbed by 1.7% to $2.98 billion and earnings rose by 34% to $389 million. As seen with the performance of other hotel operators, such as Marriott International (MAR), Starwood Hotels & Resorts Worldwide (HOT) and Extended Stay America (STAY), investors are certainly bullish on the sector.

Hilton expects to launch its roadshow this week, and a deal is slated to hit the markets on December 13th (yes, that’s Friday the thirteenth). If everything goes according to plan — raising $2.4 billion — it will be the second-largest deal in 2013, behind Plains GP Holdings LP (PAGP).

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.

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