Hilton to Be Acquired by Blackstone Investment Funds

Hilton Hotels Corporation entered into a definitive merger agreement with The Blackstone Group’s real estate and corporate private equity funds in an all-cash transaction valued at approximately $26 billion. Under the terms of the agreement, Blackstone will acquire all the outstanding common stock of Hilton for $47.50 per share.

Hilton’s Board of Directors approved the transaction. It is anticipated that the transaction will close during the fourth quarter of 2007; completion is subject to the approval of Hilton’s shareholders, as well as other customary closing conditions.

A special shareholders meeting will be scheduled at a later date. Blackstone intends to invest in the Hilton properties and brands globally to enhance and grow the business for the benefit of owners, franchisees and customers. Blackstone views Hilton as an important strategic investment; no significant divestitures are envisaged as a result of this transaction.

The transaction is not contingent on the receipt of financing. Financing commitments have been provided by Bear Stearns, Bank of America, Deutsche Bank, Morgan Stanley and Goldman Sachs. These institutions also served as financial advisors to Blackstone.

Simpson Thacher & Bartlett LLP acted as legal advisor to Blackstone. UBS Investment Bank and Moelis Advisors acted as financial advisors to Hilton, and Sullivan & Cromwell LLP acted as legal advisor to Hilton.