Costa Rica Real Estate

Is the Cash Plus /Hilton buyout still on?

Is the Cash Plus /Hilton buyout still on?

Cash Plus's buyout of the Hilton Kingston Hotel may not be a done deal in light of this week's announcement of the US$26-billion buyout of the entire Hilton Hotel international chain by United States private equity firm, Blackstone.

Claudette Kenlock, sales and marketing director of the Hilton Kingston Hotel, told Caribbean Business Report, "In terms of the impact on the sale of the hotel, I can't comment until we have directives from Cash Plus and the Hilton Group." Senior Cash Plus executives, Carlos Hill and Marie Matthews, were said to be in a long management meeting and unable to speak to the press yesterday.

Since 2000, Hilton shares have climbed from US$9.5 to US$34 (257 per cent), and the company had been busy creating international partnerships. Blackstone paid a 32 premium on the Hilton's market value to acquire not just the hotel management business but the real estate held by the company; and this is one of the reasons local commentators say that the Cash Plus deal is in doubt.

According to the Financial Times report on July 4th, "Blackstone made clear it regarded the Hilton deal as a double play, the purchase offering both asset and operational benefits. Arthur de Haast of JLL Hotels said:
"One of the things this deal throws up is a private equity company buying into not just the real estate but the operational entity and a brand. They are a competitor as well as an owner." InvestorGuide.com wrote, "For one, it is unlikely that the company will be dismantled and sold for scrap. Hilton has done better than its competitors over the past five years, and had been forging ahead with several big deals to expand its international reach."

Less than a week after its $4.1-billion initial public offering on the New York Stock Exchange, the purchase of the Hilton Hotel gives Blackstone its choice of 600,000 hotel rooms worldwide.

Hilton operates in three business segments: Hotel Ownership, Managing and Franchising and Timeshare.
Its operations covers 2,357 properties. The hotel brands include Hilton, Hilton Garden Inn, Doubletree, Embassy Suites, Hampton, Homewood Suites by Hilton and Conrad. In addition, the company develops and operates timeshare resorts through Hilton Grand Vacations Company and its related entities.

Besides Jamaica, Hilton has hotel properties in Belgium, Egypt, England, Hong Kong, Ireland, Mexico, Puerto Rico, Singapore, Thailand and Turkey and franchised hotel properties in Canada, Colombia, Costa Rica, Dominican Republic, Ecuador, Mexico, Peru, Puerto Rico and Venezuela.

The Hilton family, trustees to the William B Hilton Trust, own 20 per cent of the company and stand to gain US$900 million out of the deal.

posted by Coldwell Banker Costa Rica @ 12:26 PM