Hilton sets terms of one of year's biggest IPOs

NEW YORK Hilton Worldwide Holdings Inc. said Monday the company plans to sell stock worth an estimated $2.2 billion in its initial public offering, making its return to the public markets one of the year's biggest IPOs.

The hotel operator disclosed in a regulatory filing Monday that the offering of 112.8 million shares is expected to price between $18 and $21 each. Hilton is offering about 64.1 million shares, and selling shareholders are offering another 48.7 million shares. 

Assuming shares price in the middle of that range, Hilton anticipates net proceeds of about $1.21 billion, which it plans to use to repay debt. That price would give the McLean, Virginia-based company a value of about $19.2 billion. 

Hilton was taken private by The Blackstone Group, an investment firm, in October 2007 for $20 billion. Blackstone will still own a majority of the voting power of shares eligible to vote in the election of board members, according to the filing. 

The recession began soon after Blackstone bought Hilton. Hotel operators were hurt due to a drop in business travel, fewer vacationers, falling real estate prices and a general oversupply in the U.S. market. In the past two years, the industry has started to turn around as business travel is improving and room rates are rising. 

The IPO also comes during a bumper crop of new public listings. Roughly 200 companies have gone public in 2013, as the markets have hit record highs. The benchmark S&P 500 index has jumped more than 26 percent this year. Some other standout IPOs include Twitter, which raised about $1.8 billion; energy company Plains GP Holdings LP, which raised about $2.8 billion; and Zoetis, a spinoff from Pfizer, which raised $2.2 billion. 

Hilton has 4,080 hotels, resorts and timeshare properties. Its brands include Hilton Hotels & Resorts, Waldorf Astoria Hotels & Resorts, and Hampton Inn.  The company's properties range from full-service hotels and properties that provide a limited amount of specific services to luxury resorts and a timeshare brand. 

The company's history dates back nearly a century. Company founder Conrad Hilton purchased his first hotel, the Mobley Hotel in Cisco, Texas, in 1919. The first hotel to have the Hilton name was built in Dallas in 1925. Hilton says that the pina colada cocktail was invented at the Caribe Hilton in Puerto Rico in 1954. Its franchise program was launched in 1965, and in 1971 John Lennon handwrote the lyrics to "Imagine" on a piece of New York Hilton stationery while at the hotel. 

In 1975 the Muppet characters Statler and Waldorf were introduced, named after two Hilton properties in New York. The HHonors guest loyalty program debuted in 1987 - it now has 39 million members. The company's website, hilton.com, launched in 1995, followed by its first smartphone app in 2009. 

The stock is expected to list on the New York Stock Exchange under the symbol "HLT."