Blackstone Considers Sell-off of Hilton Portfolios

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. August 10, 2009

AUGUST 10, 2009 - It is understood that Blackstone, which bought Hilton for $26bn at the height of the market, is considering a number of options, including the sale of portfolios of hotels to rival chains, debt-for-equity swaps, as well as public listing of certain parts of the group.

Blackstone needs to draw up the plans to maximise value from the group ahead of debt repayment deadlines in three to four years.

A source close to the group told The Independent: "These are very much early stage discussions, but clearly the $21bn worth of debt raised to buy Hilton back in 2007 isn't going to be easily refinanced. The costs on servicing the debt aren't onerous, but the world has changed a lot since this deal was done and preparations need to be made."

However Blackstone has denied reports for any split, and a spokeswoman for the group told BTN that plans for a breakup of Hilton were "categorically untrue".

It is thought that at the height of the market slump, Blackstone could have lost up to half of the value of its investment, due to both consumers and business travellers cutting back on their travel spend.

In the deal, Blackstone acquired nearly 3,000 properties and 480,000 rooms, adding to a portfolio of other hotel assets, to make it the world's biggest operator.

News of possible change comes as the hotel and travel market suffers one of the toughest years in recent memory.