Hilton on $416 million selling spree
Hilton Hotels Corp. has sold 11 hotels for $416 billion but that’s not the end of it. The company says it plans to shed another eight more properties.
Hilton generated net proceeds of $335 million from the sales. The company is selling its hotels in a change of strategy. Hilton wants to manage and franchise more hotels rather than owning them outright, according to news reports.
Said Robert M. La Forgia, senior vice president and chief financial officer of Hilton:
“One of our stated objectives going into 2005 was to take advantage of the favorable markets and sell certain hotel assets — in the process obtaining attractive prices and retaining the properties within the Hilton family of brands — and we have delivered very successfully so far.”
All of the sold properties are remaining in the Hilton system.
The hotels include a 405-room Hilton in East Brunswick, New Jersey, that sold for $43 million, and a 500-room Hilton in Alexandria, Virginia, that sold for $93.1 million.
Other Hiltons for sale are in Anchorage, Alaska, Portland, Oregon, San Diego and other locations. The plan is to sell a total of up to $700m of hotel assets over the next 12 months and to return most of the proceeds to shareholders, probably via a special dividend or share buy-back.
Hilton said that if this initial sell-off goes well, more of its $4.5 billion asset base might be put on the block.
Report by David Wilkening
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