Hilton acquisition turns positive for Blackstone, sources say

NEW YORK CITY When Blackstone LP releases its fourth quarter earnings statement on Thursday, it could include news that seemed unthinkable just a few months ago: its US$26 billion buyout of Hilton Worldwide has turned profitable.

Sources tell The Wall Street Journal that Blackstone’s real-estate investment portfolio has scored gains of about 40%, due to a combination of improvements in the overall economy and Blackstone’s recent financial maneuvering to reduce Hilton’s US$20 billion debt load by about a fifth. Estimates last year pegged Hilton’s value as having dropped 70% since Blackstone’s 2007 acquisition.

Blackstone is still believed to be strategizing an exit from its Hilton stake, likely by taking it public, but the private equity firm still has no timetable or plan in place, the Journal reports.