NEW YORK (AP) — Hilton is back, and in a big way.
The hotelier, which went private in 2007, on Wednesday priced its initial public offering at $20 per share. The company and a shareholder are selling 117.6 million shares, about 5 million more than originally planned, for a total take of $2.35 billion.
The payoff surpasses the $2.1 billion generated by Twitter's IPO last month. If the banks involved buy the extra shares in the deal — the overallotment — it will be the second-biggest IPO of the year, behind Plains GP Holdings LP at $2.9 billion.
Hilton Worldwide Holdings Inc. is the world's largest hotel group, with 665,667 rooms across 90 countries and territories. It traces its roots back to 1919 and claims it was the site for a number of historical events, including John Lennon's penning of one of his most popular songs in New York and the creation of the pina colada in Puerto Rico.
It's also the largest hotel IPO ever, according to Morningstar analyst Chad Mollman.
The offering would give Hilton a total market value of $19.7 billion. That tops rivals Marriott International and Starwood Hotels & Resorts Worldwide Inc., each with market capitalizations of $13.8 billion as of the close of trading Wednesday.
Blackstone led a $20 billion deal to take Hilton private in October 2007. The timing couldn't have been worse. The worldwide recession was about to hit. Business travelers — with their deep expense accounts — stopped traveling and corporate events were scaled back. Millions lost their jobs and families canceled vacation plans.
Blackstone brought in new management to run Hilton and focused on expanding its luxury brands, Waldorf Astoria and Conrad, and growing its footprint through more franchise deals. Like most hotel companies, Hilton doesn't own the vast majority of its properties; just 157 of its 4,041 hotels, resorts and timeshare properties are owned by the company. For the rest, it either has a management agreement to run the hotel or franchises out one of its 10 brands.
Just about all of its growth since 2007 has come from such deals and the slow improvement in the global economy. The company now fills 72.3 percent of its rooms, compared with 68.4 percent in 2010. It can also charge more for those rooms: $136.43 during the first half of this year, compared to $126.06 in 2010.
Last year, Hilton had $9.3 billion in revenue and posted a profit of $359 million.
Blackstone typically holds companies for just a few years before selling to provide cash to its investors. The recession probably delayed Blackstone's turnaround plans for Hilton. But now with the hotel group's key metrics climbing, and real estate IPOs making a splash in 2013, the time was ripe to attract investors.