Hilton Worldwide, in a move analysts had predicted with increasing frequency in recent months, said it will once again sell shares of its stock to the public as owner Blackstone Group looks to benefit from a resurgent lodging market while paying down debt.
Hilton, in a Sept. 12 filing with the Securities and Exchange Commission, said it would try to raise up to $1.25 billion in the offering, though didn't disclose details on how many shares would be sold, how they would be priced or what percentage of the company's shares would be offered.
Blackstone, which took the company private in 2007 for about $26 billion, has helped turn around the financial fortunes of a company that Conrad Hilton founded in 1919 and that took a $5.66 billion loss in 2008.
Hilton has boosted its number of rooms by 34% during the past six years. Last year, Hilton boosted its net income 39%, to $352 million, while revenue rose 5.6%, to $9.28 billion.
Blackstone said in the filing that it would use the proceeds from the offering to pay down debt and fund corporate operations.
As of June 30, the company had $15.1 billion in debt, down from $15.6 billion at the end of last year and down from $21.2 billion at the end of 2008.
"Hilton has been operationally pruning expenses at their largest owned hotels to bring more profit to the bottom line for more than a year," said Rick Swig, president of San Francisco-based hospitality consultant RSBA & Associates. "There have been major efforts in Hilton-owned hotels, including Honolulu, New York, and San Francisco to … enhance potential shareholder and share price value."
If Hilton Worldwide were to go public today, it would be the second-largest publicly traded U.S. hotelier by sales to Marriott International, whose 2012 revenue fell 4.1%, to $11.8 billion, after the company spun off its timeshare business.
Starwood Hotels & Resorts, the No. 2 public U.S. hotelier, boosted its revenue last year by 12%, to $6.32 billion. With Starwood's shares up 20% in the past year, the company's market value has leapfrogged Marriott's to hit about $13.3 billion, while Marriott's market value is about $12.9 billion after that company's shares rose about 9% in the past year.
Hilton, which has more than 4,000 hotels totaling more than 665,000 rooms in 90 countries, has an additional 18% of its room total under construction.
After completion of the IPO, affiliates of Blackstone Group will continue to own a majority of the voting power to elect the company's board of directors.
Blackstone, along with Centerbridge Partners and Paulson & Co., said it would take Extended Stay America public less than three years after buying the company for about $3.9 billion. Blackstone also acquired the Motel 6 budget chain from Accor last year for $1.9 billion.