Shareholders filed a lawsuit in Delaware Chancery Court and are seeking class action status against the hotel alleging the company's sale price was too low. Hilton Hotels agreed to be purchased by Blackstone Group for $20 billion, the largest hotel acquisition ever. The buyout would make Blackstone the world's largest hotel operator as measured by number of beds.
The lawsuit claims the proposed merger is grossly unfair, inadequate, and substantially below the fair or inherent value of the company.
If the sale does not go through, Hilton must pay Blackstone $560 million. If the sale does go through, Hilton Chief Executive Officer Stephen Bollenbach will collect $52 million and the hotel's President, Matthew Hart, will collect $15 million. Shareholders could receive $47.50 per share.
Hilton shares rose 32 cents to $45.75 on Friday July 6, 2007, valuing the company at $17.8 billion. Blackstone shares rose 87 cents to $31.50.
