China’s HNA to buy 25% Hilton stake from Blackstone

The $6.5B deal will reduce Blackstone’s holding in the company to 21%

Oct.October 24, 2016 02:17 PM

Chinese shipping and aviation giant HNA Group will buy a roughly 25 percent stake in Hilton Worldwide Holdings from Blackstone Group, the company announced Monday.

Under the $6.5 billion deal, HNA will pay just over $26 a share in cash for the stake, which is 15 percent more than Hilton’s Friday closing price of just under $23 a share, the Wall Street Journal reported. The sale will reduce Blackstone’s holding to 21 percent and make HNA the biggest shareholder in the company.

Earlier this year, Hilton announced around 70 percent of its hotel properties would be spun off into a publicly-traded real estate investment trust.  The move splits Hilton into three district entities. HNA will own around 25 percent of all three companies upon the closing, which is expected to take place in the first quarter of 2017.

Negotiations between HNA and Blackstone reached an advanced stage in June, according to the Journal.

HNA agreed to hold onto the stake for two years, and will need board approval to purchase any more shares. Both HNA and Hilton want to make use of China’s expanding outbound tourism market.

This deal is yet another example of a major Chinese investor making a play for commercial real estate in the United States. Earlier this month, China Life Insurance purchased a $2 billion stake in Starwood Capital Group’s U.S. hotels.

In March, Beijing-based insurance giant Anbang Insurance Group agreed to buy Blackstone’s Strategic Hotels & Resorts portfolio, which has 16 hotels including JW Marriott Essex House at 160 Central Park South. The company paid $1.95 billion for the Waldorf Astoria in 2015.  The company also tried to buy Starwood Hotels & Resorts TRData LogoTINY for $14 billion, but abruptly withdrew the offer in March.  The move paved the way for Marriott International to acquire Starwood for $13 billion. [WSJ]Miriam Hall

Related Articles

Clockwise from bottom left: 62-60 99th Street in Rego Park, 850-870 Third Avenue in Sunset Park and Square Mile Capital’s Craig Solomon with renderings of 550 Clinton Avenue in Brooklyn (Credit: Google Maps; Getty Images; Morris Adjmi Architects)

These were the top outer borough loans last month

Blackstone's Jonathan Gray, Gaedeke Group's Sabine Gaedeke Stener and 44 Wall Street (Credit: Stener by Gaedeke Group; Gray by Drew Angerer/Getty Images, 44 Wall Street via Google Maps)

Blackstone sells office tower at 44 Wall Street for $200M

Brookfield Property Group’s Brian Kingston, Blackstone Group's Jonathan Gray and 1 Liberty Plaza (Credit: Google Maps)

Brookfield, Blackstone consider One Liberty Plaza sale

Survivors accused Hilton, Marriott, Wyndham and others of knowing about sex trafficking on the property and still financially benefitting (Credit: Wikipedia Commons, iStock)

Major hotel chains named in sex trafficking lawsuits

Beverly Hills’ Waldorf Astoria planted a mole inside the Peninsula to steal clients, lawsuit says

Beverly Hills’ Waldorf Astoria planted a mole inside the Peninsula to steal clients, lawsuit says

Liberty View Plaza at 850 3rd Avenue and Marvin Schein (inset) (Photo by Axel Dupeux)

City lets Salmar bring office tenants to Brooklyn industrial property

Brookfield's largest-ever $15B property fund has invested in properties from New York (666 Fifth Avenue) to Bangalore (the Leela Palace hotel) (Credit: Brookfield, Getty Images, Leela)

Real estate fundraising hits lowest level since 2013

Hilton CEO Christopher Nassetta and Arianna Huffington (Credit: Getty Images)

Hilton unveils new brand, with a hand from Arianna Huffington