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Last Updated: Wednesday, 4 July 2007, 00:36 GMT 01:36 UK
Blackstone buys Hilton for $26bn
Blackstone said it would grow the Hilton business
US private equity group Blackstone is buying the global Hilton Hotels chain for $26bn (13bn) in an all-cash deal.

Under the deal, Blackstone is paying $47.50 for each Hilton Hotels Corporation share, a 32% premium over their closing price on Tuesday.

Blackstone said the deal had been approved by Hilton's board, and was due to be completed by the end of 2007.

The surprise announcement comes two weeks after Blackstone raised $4.13bn through floating a 13.2% stake.

Private equity firms are investment companies that raise money from private sources rather than by using the stock market.

Our priority has always been to maximise shareholder value
Hilton chief executive officer, Stephen Bollenbach

They typically buy up businesses they believe can fare better, with a view to improving their performances and eventually, selling them on for a profit.

Blackstone said it intends to grow the Hilton business.

Numerous hotel brands

The private equity firm already has a number of hotel investments, including La Quinta Inns and Luxury Resorts and Hotels.

US-based Hilton's other brands include Conrad Hotels, and the Waldorf-Astoria Collection.

Blackstone's co-founders, Stephen Schwarzman, 60, and Peter Peterson, 81, earned more than $2.4bn between them from last month's share sale.

Hilton said the deal would be good news for its shareholders.

"Our priority has always been to maximise shareholder value. [The deal] provides compelling value for our shareholders with a significant premium," said Hilton co-chairman and chief executive officer, Stephen Bollenbach.

The global network of Hilton hotels were reunited as one company in 2006 after a 42-year split.

The reunion happened after Hilton Hotels Corporation (HHC) paid $3.3bn to buy the 400 international Hilton hotels owned by UK-based Hilton Group.

The division took place in 1964, when HHC sold off all its overseas hotels to concentrate on the US market.

What Blackstone plans for the Hilton Hotels chain

Blackstone surges on Wall Street
22 Jun 07 |  Business
Blackstone float raises $4.13bn
21 Jun 07 |  Business
Hilton shareholders approve sale
27 Jan 06 |  Business
Hilton hotels businesses reunited
29 Dec 05 |  Business

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