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The Chinese group HNA buys 25% of Hilton Worldwide from Blackstone

As it completes the process of buying out Carlson Rezidor, the Chinese group, which owns shares in NH Hotels, Pierre&Vacances/Center Parcs and Red Lion Hotels groups, has announced the takeover of 25% of the capital of the group Hilton Worldwide from the American investment fund Blackstone. In doing so it will become the leading shareholder.

HNA, represented by Mr Cheng Feng, and which is currently buying the group Carlson Rezidor, has announced his intention to take over 25% shares in the American hotelier Hilton Worldwide, from Blackstone, its primary shareholder since 2007. The Chinese conglomerate is prepared to pay 26.25 dollars per share (14.6% more than the closing price on October 21) or a total investment of 6.25 billion dollars. The company is thus valued at 26 billion dollars. 

Through this operation, Blackstone should reduce its share in the capital of Hilton Worldwide to 21%. It will nonetheless continue to hold two seats on the board of administration once the agreement has been finalized in the first quarter 2017, while HNA will be represented by two members on the board of administration, if the transaction is completed.

Adam Tan, Vice Chairman and CEO of HNA group declared: "This investment is consistent with our strategy to enhance our global tourism business, and we look forward to working together on new initiatives that leverage our respective strengths, expertise and tourism platforms to provide travelers more choice, value and world-class services."

In 2007, Blackstone bought the Hilton hotel group for 26 billion dollars (19 billion euros) or 47.50 dollars per share, and then reintroduced it to the stock market in December 2013, keeping some of the capital (45.8% at the beginning of 2016). This operation with HNA is thus a success for the American investment fund, which withdraws at a good price (partially, as it retains 21% of capital). The Chinese group, meanwhile, further expands its tentaculaire empire that we explained a few months ago in our columns.

For the record, HNA is currently in conflict with the management of the Spanish group NH Hotels, of which it owns 30% of shares, but was excluded from the board of administration because the acquisition of Carlson Rezidor that is underway presents a conflict of interests. 

This transaction recalls the operation realized by Jin Jiang which bought Louvre Hotels Group from Starwood Capital for 1.3 billion euros in March 2015, prior to entering the capital of its competitor AccorHotels a few months later. This seems to be becoming the popular  strategy for Chinese investors ...

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