This is not that much of a surprise. The Bev Hills-based hotel company has been a rumored takeover candidate for months, though one adviser close to the $26 billion, $47.50-a-share deal told the Financial Times that it had been put together quite recently. Hilton's board signed off on it in Bev Hills; it's espected to be completed by the end of the year. You can't help but feel sorry for Matthew Hart, Hilton's president and COO who was slated to succeed Stephen F. Bollenbach as CEO in early 2008. That still might happen, but running Hilton as a privately held company won't quite be the same. Bollenbach is credited with expanding the Hilton brand all over the world. Just a month ago, it announced deals with three separate real estate groups to develop properties in Russia, the United Kingdom and Central America. Blackstone, the giant investment group that just went public, said it views Hilton as an important strategic investment and doesn't plan significant divestitures. (Well, that remains to be seen.)

“Our priority has always been to maximize shareholder value," Bollenbach said in a statement. "Our Board of Directors concluded that this transaction provides compelling value for our shareholders with a significant premium. We are delighted that a company with the resources and reputation of Blackstone fully appreciates the value inherent in our global presence, strong brands, industry leading marketing and technology programs, and unique portfolio of hotel properties.” Said Jonathan Gray, Blackstone's Senior Managing Director: "It is hard to imagine a better strategic fit for us than Hilton with its world-class people, brands and network of hotels. This transaction is about building the premier global hospitality business." (Financial Times, Hilton press release)

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