Hilton Shares Move Higher After IPO
Investors on Thursday were eager to check into shares of Hilton Worldwide Holdings (NYSE: HLT), pushing the hotel chain’s stock higher in their debut in an initial public offering.
The stock closed up $1.50, or 7.5%, at $21.50, a healthy bump to its $20 IPO price, and hit an intraday high of $21.92.
Hilton’s stock rose despite a broader market selloff which saw the Dow Jones Industrial average fall by about 104 points. The IPO also pushed the stocks of other hotel chains higher.
The McLean, Va.-based hospitality company raised about $2.35 billion through the sale of 117.6 million shares, the third largest domestic IPO this year and the largest hotel IPO ever, according to Dealogic.
Hilton, the world’s largest hotel chain, said it will use some of the proceeds to pay down $1.25 billion in debt.
The IPO gave Hilton a market capitalization of about $21 billion.
In two signs of strong demand, the number of shares sold to the public was boosted late Wednesday from about 112 million, and Hilton moved the IPO up one day, an indication that the deal’s underwriters were easily selling the stock.
Six leading Wall Street investment banks -- Goldman Sachs (NYSE: GS), Bank of America’s (NYSE: BAC) Merrill Lynch unit, Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), JPMorgan Chase (NYSE: JPM) and Deutsche Bank (NYSE: DB) – managed the deal.
In its IPO filing with the Securities and Exchange Commission, Hilton Worldwide said it owns and manages 4,080 hotels, resorts and timeshare properties comprising 671,926 rooms in 90 countries and territories, and operates under 10 different brands.
Its flagship Hilton Hotels & Resorts brand is one of the most recognized hotel brands in the world.
Other well-known Hilton brands include its Waldorf Astoria Hotels & Resorts and Conrad Hotels & Resorts, the full-service hotel brands, DoubleTree by Hilton and Embassy Suites Hotels, the focused-service hotel brands, Hilton Garden Inn, Hampton Inn, Homewood Suites by Hilton and Home2 Suites by Hilton and the timeshare brand, Hilton Grand Vacations.
Some of the company’s better known properties include The Waldorf Astoria New York, the Hilton Hawaiian Village and the London Hilton on Park Lane.
Hilton employs more than 311,000 workers and claims 39 million members in its customer loyalty program, Hilton HHonors.
The company was purchased by private equity firm The Blackstone Group (NYSE: BX) for $25 billion in 2007. Since then, Hilton said its number of rooms has grown by 40%. Blackstone is widely credited with reviving the Hilton brand.
For the nine months through Sept. 30, Hilton's revenue rose 2.2% to $7.1 billion, according to a filing.
The company is led by President and Chief Executive Christopher J. Nassetta, who was swiped away from Hilton rival Host Hotels & Resorts Inc shortly after the Blackstone buyout.