Large … large … large! It all adds up when you connect the dots.
Hilton, the world’s largest hotel company, issued the largest IPO ever by a hotelier this week, and the stock is soaring, according to a report by USA Today.
This bodes well for Blackstone, the private-equity firm that took Hilton private in 2007, paying $26 billion for its stock. While it appears that the $2.35 billion resulting from the IPO would be a huge loss for Blackstone, whereas it actually has the potential to do the exact opposite, as the IPO represents less than 12% of the total 117.6 million shares in this offering.
….At the current trading price, that puts a more than $21 billion valuation on the hotel operator. When you add in the fact that Hilton still has about $15 billion in outstanding debt from Blackstone's buyout, Blackstone has made an almost-unprecedented paper profit on the IPO, with Bloomberg estimating the private-equity firm's take at $8.5 billion.