China’s HNA Group takes 25% stake in Hilton

HNA Group, the giant Chinese hotel and tourism company, agreed to buy about 25% of Hilton Worldwide Holdings Inc from Blackstone Group LP for about US$6.5 billion. HNA, controlled by Chen Feng, will pay US$26.25 a share in cash, or 15 per cent more than Hilton's closing price on Friday. Under the deal, HNA cannot reduce its 25% stake over the next two years or increase it without Hilton's permission. The deal, which is expected to go through in early 2017, will cut Blackstone's share in Hilton to 21%.

This latest move by HNA is part of the group's efforts to become a "global tourism business," said the company's chief executive Adam Tan. HNA announced in April that it had agreed to acquire Carlson Hotels, which owns the Radisson and Park Plaza brands.

"This investment is consistent with our strategy to enhance our global tourism business, and we look forward to working together on new initiatives that leverage our respective strengths, expertise and tourism platforms," Adam Tan, vice chairman and chief executive officer at HNA Group, said in the statement. J.P. Morgan advised HNA on the stake purchase. U.S. independent investment bank Evercore advised the Hilton board.

“The hotel real estate market is very mature. There are not a lot of surprises,” said Jan Freitag, senior vice president at STR, a hotel research firm. “It’s a good place to park your money.”