The $5.5 billion deal backing Hilton Hotels' acquisition of Hilton Group PLC came to market last Tuesday. The deal will unite the two Hilton brands that split in the 1960s and will allow Hilton Hotels, which operates primarily in the U.S. and Canada, to become a global hotel business. The merger will create the largest hotel company in the world in terms of revenue.
The Bank of America and UBS-led credit comprises a five-year, $2.75 billion revolver; a five-year, $2 billion term loan "A" and a seven-year, $750 million "B" term loan. The pricing on the revolver and term loan "A" is LIBOR plus 1 1/2%, while the term loan "B" has pricing of LIBOR plus 1 5 /8%. The deal is solely for the hotel operations of Hilton Group. The British company will then change its name to Ladbrokes PLC and switch its focus to its betting operations, which are prevalent throughout Europe.
The reorganized Hilton Hotels business will comprise almost 2,800 hotels throughout 80 countries. Brands will include: Conrad, Doubletree, Hampton Inn, Hilton Garden Inn, Homewood Suites by Hilton and Hilton Vacations Club, as well as the flagship hotel. A spokeswoman at Bank of America declined comment. Calls to Hilton and UBS were not returned.