New York – Shares of Mar riott International, Starwood Hotels & Resorts Worldwide and other hotel chains gained after the proposed buyout of Hilton Hotels Corp. increased speculation that others in the industry may be bought.
Hilton, the second-largest U.S. hotel chain, agreed July 3 to sell itself for $20 billion to Blackstone Group LP. The purchase is a record for the hotel industry and would make the buyer the biggest lodging company by number of beds if approved.
Hotel acquisitions worldwide have more than doubled in the first half of the year to $81.4 billion. The companies’ cash flow and real estate assets are attractive to investors.
Blackstone joins other buyout firms Apollo Management LP and TPG Inc. in targeting hotel chains.
“Any of the hotel companies certainly could be takeout targets,” said James Corl, chief investment officer at Cohen & Steers Inc., which owns 6 million Hilton shares. Real estate and related companies’ stocks are trading at “big” discounts, he said, citing Starwood as the “most obvious” example.
Starwood’s stock jumped $5.42, or 7.8 percent, to $74.55 in New York Stock Exchange composite trading, the most since July 2002. It has gained 19 percent this year.
Marriott shares climbed $3.11, or 7 percent, to $47.57, the biggest rise since April 2004.
