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Hilton Hotels, the chain founded by Conrad Hilton 88 years ago, has agreed to be taken over by buyout firm Blackstone for about US$26 billion ($33.23 billion) , the biggest acquisition of a hotel company.
Blackstone will pay US$47.50 for each share. That's 32 per cent more than its closing price yesterday.
Barron Hilton, Conrad's son and co-chairman of the company, will get US$990 million for his 20.8 million shares.
Hilton, the second-biggest US chain behind Marriott International, has more than 2800 hotels, including one on Auckland's Princes Wharf.
Blackstone, which owns the La Quinta chain, is among private-equity firms that are buying hotel companies to profit from their cash flow and real estate holdings.
"It's a classic Blackstone play: the size, the asset class, the management and the brand," said Michael Pralle, who ran General Electric real estate unit..
Hilton's outgoing chief executive officer Stephen Bollenbach said the company had "seen no other bidders".
The company has more than 480,000 hotel rooms worldwide under brands including Waldorf Astoria and Doubletree.
What started in 1919 as a single property in Cisco, Texas, grew into a hotel dynasty including some of the richest people in the US.
Forbes magazine estimated that Barron Hilton is worth US$1.3 billion.
His socialite granddaughter Paris last month served time in jail for parole violations in a drunk-driving case.
The first hotel with the Hilton name opened in 1925 in Dallas.
Hilton purchased New York's luxury Waldorf Astoria hotel in 1949.
In 1964, the company spun off Hilton International, then reunited with it last year by buying the lodging unit of UK-based Hilton Group for US$5.71 billion.
Blackstone's purchase eclipses the 1998 takeover of ITT by Starwood Hotels & Resorts Trust for US$14.6 billion, including debt.
- BLOOMBERG
