Blackstone to pay $26b for Hilton Hotels

LOS ANGELES -- Hilton Hotels Corp. said yesterday it had agreed to be acquired by Blackstone Group LP in a transaction valued at $26 billion.

The private equity group agreed to buy all outstanding Hilton shares for $47.50 each, a 32 percent premium over yesterday's closing stock price.

Hilton's board approved the deal yesterday . The company said the deal would close in the fourth quarter pending shareholder approval.

"Our board of directors concluded that this transaction provides compelling value for our shareholders with a significant premium," Stephen F. Bollenbach, Hilton's cochairman and chief executive, said in a statement.

The acquisition would take Beverly Hills-based Hilton Hotels private and boost Blackstone's portfolio of lodging properties.

Blackstone owns more than 100,000 hotel rooms in the United States and Europe spread over several hotel chains, including La Quinta Inns and Suites as well as LXR Luxury Resorts and Hotels.

Hilton Hotels owns or operates 2,800 hotels and 480,000 rooms in 76 countries and territories and includes such brands as Doubletree, Embassy Suites, and Hampton Inn.

Among Hilton's premier hotels is the Waldorf-Astoria in New York.

Blackstone said it intends to invest heavily in Hilton and does not foresee any significant divestitures.