Room with a view

24 October 2016 By Pete Sweeney Follow @petesweeneypro

China’s free-spending hospitality giant is plunking down $6.5 bln for 25 pct of the hotelier from Blackstone. It’s paying 15 pct more than market for the honor. The LBO firm triples its money in the deal. HNA at least gains a valuable, if pricey, seat at an important table.

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China's HNA Group announced on Oct. 24 it will buy a 25 percent interest in Hilton Worldwide Holdings for $6.5 billion in cash from Blackstone. The private-equity firm will see its stake reduced to 21 percent, leaving HNA as the hotel operator's largest single shareholder.

The acquisition will give HNA one board seat and the right to appoint an independent director to the 10-person board. Blackstone will retain two directors, including Chairman Jon Gray. HNA has agreed to restrictions on its ability to sell shares for two years or buy more without Hilton's consent.

At $26.25 per share, the offer price represents a nearly 15 percent premium over Hilton's closing stock price on Oct. 21. HNA also purchased Carlson Hotels earlier in the year for an undisclosed price.

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