Today marks a big day for initial public offerings, said Forbes newsmagazine in an article. It noted that Hilton Worldwide and Aramark came back to the New York Stock Exchange this Thursday.
The night before its debut on the trading exchange, Hilton made an announcement of its pricing, saying that it will be selling 117 million shares at a starting price of $20 per share, which is the higher end of its pricing range. According to research firm Renaissance Capital, Hilton raised around $2.4 billion in its IPO, which makes it the company who launched the second largest IPO this year. The IPO size of Hilton, said Forbes, was the largest IPO for a hotel chain to date. Twitter, who is no doubt the most buzzed-about listing for 2013, dropped to fourth, only raising $1.82 billion.
Hilton in 2007 was taken private by the Blackstone Group for $26 billion, with $7 billion of the amount in debt absorbed by the private equity firm. Hilton, perhaps as a mark of its independence, could consider its IPO as a milestone, as it intends to use $1.25 billion of the $2.4 billion raised to pay its debt outstanding. On the other hand, Blackstone could hold Hilton's shares in the next several years, Forbes said in its report.
Aramark opened with A $0.25 increase from its initial per share price at $20.25 apiece. Hilton followed twenty minutes later and opened with a dollar increase from its initial share price. Announcing its initial share price the night before it made its debut, Aramark said it will be offering 36.3 million in common shares at also $20 per share, which was at the lower end of its pricing range that it previously announced. Aramark's pricing meant that it had nabbed $725 million in its debut.
Aramark's debuted three times due to a series of ownership shakeups. Its second debut was on NYSE in 2001, but in 2006 was taken private by a private equity consortium lead by Aramark's own chairman Joseph Neubauer. Its first time was in 1960, trading under the ticker name "AMA" but stopped in 1983.
Aramark CEO Eric Foss expressed his optimism about the company's IPO in a video message to employees and customers. Foss said, "[T]oday we're begin a journey that follows a strategic road map to better serve our clients, consumers and communities, and at the same time deliver the value our shareholders expect and rightly deserve. We believe in our brand - a brand that defines what the service business is all about."
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