Hilton Spinoff

HNA's Hilton Spinoff Purge Sparks Talk of What's Next on Block - Bloomberg

Excerpt from Bloomberg

Is Hilton Worldwide Next on the Block for China’s Cash-Hungry HNA?

Troubled Chinese conglomerate HNA Group Co. has sold out of two Hilton-related companies so far this month. Now, investors are wondering whether Hilton Worldwide Holdings Inc. is next.

To help reduce one of the biggest debt loads in China, HNA purged its ownership in Park Hotels & Resorts Inc. earlier this month, and sold its 25 percent interest in timeshare business Hilton Grand Vacations Inc. on Wednesday for $1.1. billion. In both cases, the Chinese firm found a way to amend restrictions that kept the stock tied up until next year, leading to speculation that a similar allowance could be made for HNA’s 26 percent stake in Hilton Worldwide.

“There is a growing expectation among investors that HNA could soon look to sell its shares in Hilton,” Michael Bellisario, a senior research analyst at Robert W. Baird & Co., said in an email. A deal announcement could drag Hilton’s stock down initially, but ultimately “removing the overhang would be a positive and we expect that to translate into a higher stock price over time.”

Hilton Chief Executive Officer Christopher Nassetta has been facing questions about HNA -- the hotel company’s largest shareholder -- since the Chinese government started cracking down on overseas dealmaking last year. HNA quickly reversed a buying binge that added tens of billions of dollars in assets, reducing its stake in firms including Deutsche Bank AG and selling properties in London, Sydney and Hong Kong before starting to shed its shares in the two Hilton firms.

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