NEW YORK (TheStreet) - Blackstone BX-owned (BX) Hilton Worldwide has priced its initial public offering at $20 a share, in what is poised to be the biggest-ever U.S. hotel IPO.
Earlier in December, Hilton set its initial IPO price range at between $18 and $21 a share. While Hilton will offer its stock just below the high end of that range the McLean, Va.-based company is increasing the offering size.
Hilton will seek to sell 117.6 million shares at a price of $20 a share, raising $2.35 billion from the offering. The company will be offering 64.1 million shares, while a selling stockholder will offer 53.5 million shares, Hilton said in a filing with the Securities and Exchange Commission.
The company will list on the New York Stock Exchange (NYX) under the ticker symbol "HLT."
Ryan Meliker, an equity analyst at boutique investment bank MLV & Co. said in a Monday telephone interview he expected strong demand for Hilton's IPO given the firm's exposure to recovering consumer spending and international growth. He also noted that depending on the IPO pricing, Hilton's IPO could be a boon for stock valuations across the lodging sector.
The company plans to use IPO proceeds to pay down some of its $7.5 billion in outstanding term loan borrowings. Blackstone Group will remain Hilton's majority owners after the share offering with an over 75% economic interest in the company, according to S-1 documents.
The share offering will also be a major story to follow in the rebounding hotel industry and could also give investors a glimpse into a significant, but unheralded turnaround orchestrated by Hilton and its owners after the company's buyout, which many in the media have used as an example of the peak of a pre-crisis private equity bubble.