Hilton currently owns more than 100,000 hotel rooms in the US and Europe, ranging from limited service properties such as La Quinta Inns and Suites to high-end brands such as LXR Luxury Resorts and Hotels. Hilton's controls more than 480,000 rooms worldwide under brands ranging from Doubletree to the Waldorf=Astoria Collection.

Unlike its acquisition of Equity Office Properties, Blackstone says in a statement that "no significant divestitures are envisaged" as a result of this transaction. The company says it views Hilton as "an important strategic investment" that it plans to grow.

"This transaction is about building the premier global hospitality business," says Blackstone senior managing director Jon Gray. "We are committed to investing in the company…to continue to grow and enhance the business."

In backing up that statement, the company says it has invested approximately $1 billion in redevelopment capital in its LXR properties over the last three years and also has grown the La Quinta brand by approximately 45% since acquiring it in January 2006.

Blackstone's real estate and corporate private equity funds are collaborating on the acquisition. Financing commitments for the transaction have been provided by Bear Stearns, Bank of America, Deutsche Bank, Goldman, Sachs & Co. and Morgan Stanley. These institutions also served as financial advisors to Blackstone.

Moelis Advisors acted as financial advisors to Hilton while UBS Securities LLC and Sullivan & Cromwell LLP acted as its legal advisors. Simpson Thacher & Bartlett LLP acted as legal advisor to Blackstone.

Instant Insights /

Hilton Board Approves $26B Blackstone Buy-Out

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