{"id":1004231284,"date":"2018-05-22T02:20:20","date_gmt":"2018-05-22T10:20:20","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004231284"},"modified":"2022-12-09T01:55:23","modified_gmt":"2022-12-09T09:55:23","slug":"hilton-divestment-vindicates-blackstones-patience","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/hilton-divestment-vindicates-blackstones-patience\/","title":{"rendered":"Hilton Divestment Vindicates Blackstone\u2019s Patience"},"content":{"rendered":"

By Scott Baltic<\/p>\n

Bold moves, big money and a substantial dose of patience have added up to a huge payday for Blackstone Group. The company prepares to make its final divestment from Hilton Worldwide, more than a decade after taking the company private. Blackstone announced that it will sell 15.8 million shares, its last stake in Hilton Worldwide Holdings, for an estimated $1.3 billion. The sale, according to Bloomberg<\/em>, will bring Blackstone\u2019s profits from its investment in Hilton to about $14 billion.<\/p>\n

Commercial Property Executive<\/em> talked with an industry participant and expert, and an analyst who\u2019ve closely followed the Blackstone-Hilton saga.<\/p>\n

\"Rich<\/a>

Rich Lillis, Colliers International<\/p><\/div>\n

\u201cAt the time, and for the first few years, the Blackstone LBO seemed like a top-of-the-market expensive deal,\u201d<\/em> Rich Lillis, executive vice president & national director at Colliers International, recalled to CPE<\/em>. The crucial point, he explained, is that the 2007 Blackstone LBO closely followed the 2005 acquisition of Hilton International by Hilton Hotels Corp. \u201cFor decades, Hilton was two companies: International and U.S. There was little to no integration.<\/em>\u201d\u00a0Even after the merger and acquisition to form a single global Hilton, Lillis continued, \u201cthe benefits took years to be fully realized<\/em>.\u201d<\/p>\n

It wasn\u2019t until Hilton moved its headquarters to Virginia and named Christopher Nassetta as its CEO that the integration was complete, Lillis added. Under Nassetta\u2019s leadership, he continued, \u201cHilton has truly blossomed by reinvigorating legacy brands and launching terrific new brands,\u201d<\/em> such as Home2 Suites (2011), Curio (2014), Canopy (2015) and Tru (2016).\u00a0Along the way, Lillis said, \u201ca global development organization became very effective at increasing Hilton hotel distribution everywhere<\/em>.\u201d<\/p>\n

\"Michael<\/a>

Michael Bellisario, Robert W. Baird & Co.<\/p><\/div>\n

\u201cBlackstone selling its remaining stake was a matter of when, not if<\/em>,\u201d Michael Bellisario, a senior research analyst covering hotel REITS and C corporations at Robert W. Baird & Co., told CPE<\/em>.\u00a0 \u201cIt\u2019s standard operating procedure for private equity firms to gradually sell shares over time, especially if the price has increased, like it has for HLT. PE owners like Blackstone don\u2019t intend to hold shares forever<\/em>.\u201d<\/p>\n

\u201cIf anything, it was a little later than we would have expected<\/em>,\u201d Bellisario said. \u201cBut it\u2019s possible that Blackstone didn\u2019t sell its last tranche until after HNA completed its share sale<\/em>.\u201d<\/p>\n

A quick timeline:<\/p>\n