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HNA plans to sell part or all of its Hilton stake

HNA Group is planning to sell part or all of its US$6.3 billion stake in Hilton Worldwide via public offerings, according to a regulatory filing with the U.S. government.

Hilton declined to comment on the filing.

The Hainan, China-based conglomerate – which has investments in aviation, real estate and technology, among other companies – also is a 70% stakeholder in Radisson Hotel Group. “Our strategic five-year operating plan is not affected by these types of changes at HNA in various investment stakes they have,” a Radisson spokesman said. 

It bought a 25% stake in Hilton in late 2016 from Blackstone Group, and it now owns 26.1% of the company. That’s US$6.4 billion in aggregate value of 82.5 million shares.

Its strategy of heavy investments over the past two years shifted recently with attempts to pay off debt. It had taken out loans to fund the Hilton investment, and owed US$3.5 billion to international lenders.

The move wasn’t totally unexpected, according to R.W. Baird’s Michael Bellisario. HNA’s ownership “has caused some investor uncertainty amid various media reports regarding the health of HNA’s business,” he wrote in a note, but HNA’s exit would be a positive move for Hilton shares and valuation. A US$1 billion stock repurchase, he said, could boost Hilton’s earnings per share by about 2%.

HNA in January said it was looking for buyers of its majority stake of nearly 30% in Spain’s NH Hotel Group, at the time valued at about US$772 million, according to reports.

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