Bollenbach saves the best for last

Stephen Bollenbach, chief executive officer of Hilton Hotels Corp, made sure his last deal was his biggest.

The 64-year-old Bollenbach agreed July 3 to sell the company he's run since 1996 to Blackstone Group LP for $20 billion, a record in the hotel industry.

At the end of this year, he plans to step down as CEO of the second-biggest US hotel chain.

During his career, which included leading Marriott Corp and overseeing Walt Disney Co's finances, the Los Angeles native has made more than $52 billion of transactions, $32 billion at Hilton.

In the process, he has managed to make his shareholders wealthier.

"He's the consummate dealmaker," said Robert LaFleur, an analyst at Susquehanna Financial in Stamford, Connecticut. "All you have to do is look at the track record."

Hilton's sale comes six months after Bollenbach and the rest of Harrah's Entertainment Inc's board agreed to sell the casino company for $17.7 billion.

In 2005, Bollenbach arranged the reunion of Hilton and its overseas hotels after three decades apart by buying the lodging unit of the United Kingdom's Hilton Group Plc for $5.71 billion.

Hilton Hotels spun off Hilton International in 1964.

Bollenbach, who was paid $12.2 million in 2006, gained notice in the early 1990s when he engineered the separation of Marriott into hotel-management and real-estate companies.

In the process, he enriched shareholders, including members of the Marriott family.

Disney deal

At Disney, where he was finance chief for less than a year, he helped arrange the purchase of Capital Cities/ABC Inc for $19.5 billion.

Barron Hilton, son of founder Conrad Hilton, brought him in to take the reins of the hotel chain.

Blackstone's $47.50-a-share offer is 32 percent more than Hilton's closing price before the announcement.

It's almost quadruple what Hilton was worth when Bollenbach took over.

During the same period, the Standard & Poor's 500 index doubled.

The agreement gives Barron Hilton, who is co-chairman of the Beverly Hills, California-based company, $990 million for his 20.8 million shares. Bollenbach will continue as co-chairman of Hilton until 2010.

"This is an opportunity to capture the value created in the company," Bollenbach said in an interview on Tuesday.

"It's a very compelling price," he remarked.

Wealthy connections

Bollenbach's first job out of business school at California State University, Northridge, in 1968 was working for billionaire shipping magnate Daniel Ludwig in industries ranging from real estate to banking.

His first assignment was to value the house of Clark Gable's widow Kay.

Bollenbach joined Marriott in 1982 as treasurer and left to become chief financial officer of Holiday Corp from 1986 to 1990.

At Holiday, he helped prevent investor Donald Trump from taking over the company by borrowing $2.8 billion to fund a partial leveraged buyout.

He worked for Trump as chief financial officer in 1990, helping the real estate and casino developer reduce his personal liability for about $1 billion of debt.

When Bollenbach returned to Marriott in 1992, he split the company into Marriott International Inc, a hotel-management company, and Host Marriott Corp, a debt-laden real-estate firm.

The move, while making Marriott family members wealthier, earned him the ire of some bondholders and preferred stock investors.

Bollenbach was finance chief at Disney under Michael Eisner and during Hollywood agent Michael Ovitz's 14-month tenure as president.

He joined Hilton in February 1996 as CEO, and within a year, launched a hostile bid for ITT Corp, which eventually sold itself to Starwood Hotels & Resorts for $14.6 billion.

In 1999, he bought Promus Hotel Corp's Hampton Inn, Homewood Suites and Embassy Suites chains in 1999 for $3.7 billion.

"The hotel business has got to be attractive to people," Bollenbach said in a December 13 interview.

"Because of the size, you can invest a lot of money in one shot."

Hilton's brands include Hilton, Conrad Hotels & Resorts, Doubletree, Hilton Garden Inn, Hilton Grand Vacations and The Waldorf-Astoria Collection.

The Hilton chain was founded in 1919 by Conrad Hilton, the great-grandfather of US celebrity socialite Paris Hilton.

Her grandfather Barron Hilton owns 5.3 percent of Hilton shares.

Bloomberg News-Agencies

(China Daily 07/06/2007 page16)