Originally Posted by
Ritz
The Honors program is only part of it. The acquisition was over leveraged, and was worked out about a year and a half ago. Blackstone had to kick in somewhere between $3-$5bn in equity, and the lenders forgave $5bn of the $23-$25bn of acquisition related debt (when Hilton went from public to private). And that debt was behind mortgage debt on owned hotels. Net cash flow during the downturn was used to keep the "deal" afloat at the expense of cap exp at the hotels and loyalty programs.
My company is in the same situation when one of its portfolios went private at the peak and developed liquidity issues. So I know how the portfolio quality suffered. That is my concern with a TPG takeover. They will acquire it, clean it up, and sell it to xxx airline group or go public in five years. And make more than a few bucks. Nothing wrong with that mind you, but as loyal customers, they say we are a priority (with their fingers crossed and behind their backs). Frankly, I'd rather see the existing team get a shot at raising capital independent of the sharks circling and making a go of it.