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December 16, 2009

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Abu Dhabi buys stake in Hyatt

ABU Dhabi's biggest sovereign wealth fund has bought more than 10 percent of the Hyatt Hotels Corp shares floated by the hotelier last month.

Chicago-based Hyatt disclosed the sale on Monday in a filing with the United States Securities and Exchange Commission. The deal was made public on the same day oil-rich Abu Dhabi agreed to pump US$10 billion in bailout funds into its struggling neighbor Dubai.

The filing said the Abu Dhabi Investment Authority bought nearly 4.8 million, or 10.9 percent, of Hyatt's Class A common shares. Its overall stake in the company is considerably lower, however, because the wealthy Pritzker family holds the bulk of other stocks known as Class B shares that give it voting control over the company.

ADIA spokesman Euart Glendinning confirmed the purchase yesterday and said the fund intends to remain a minority shareholder. Financial terms were not disclosed.

Hyatt shares closed at US$29.05 last Friday, the last trading day before the deal became public. At that price, ADIA's stake is worth about US$139.4 million.

ADIA is the largest of several investment funds Abu Dhabi uses to invest its oil wealth. It is perhaps best known for agreeing to pump US$7.5 billion in Citigroup Inc in late 2007.

The size of its holdings has not been made public, but it is believed to be the world's largest sovereign wealth fund. Estimates have ranged from less than US$400 billion to US$875 billion and more.

Abu Dhabi, like Dubai, is one of seven semi-autonomous sheikdoms that make up the United Arab Emirates, among OPEC's top five oil producers. It serves as the federation's capital, with control over the presidency and nearly all the country's oil reserves.

Hyatt raised US$950 million last month when it floated 38 million Class A shares in one of the year's few initial public offerings.

Hyatt was founded in 1957 and first taken public in 1962.

It later returned to private hands, where it remained for more than 25 years until last month's IPO.


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