Hilton International Sells UK Based LivingWell Premier Health and Fitness Clubs to Bannatyne Fitness Limited.

LONDON -- Hilton International, a wholly owned subsidiary of Hilton Hotels Corporation (NYSE:HLT), has today agreed and completed the sale of its UK based LivingWell Premier health and fitness clubs to Bannatyne Fitness Limited ("Bannatyne's") for approximately GBP 90 million on a cash and debt-free basis and before working capital adjustments.

The UK transaction follows the recent exchange of contracts with Fitness First Australia Pty Limited ("Fitness First") for the sale of three LivingWell Premier clubs in Australia. Upon the expected completion of the Australian transaction later this month, the combined sale price for both the UK and Australian clubs will total approximately GBP 101 million, representing a trailing twelve month EBITDA multiple (after overhead) of 11.7x.

The sale to Bannatyne's involves 24 standalone clubs located in city centres and large towns across the UK. The 24 clubs have approximately 80,000 members and 1,800 employees.

Robert M. La Forgia, Hilton Hotels Corporation's Chief Financial Officer commented on the sale: "The sale of the LivingWell Premier health and fitness clubs follows a successful and active auction process which we launched in May of this year. While the standalone health and fitness club business was a successful component of Hilton International's operations, as a growing international hotel company it is no longer a strategic priority. As part of Bannatyne's, the business will be in a stronger position to compete in the UK health and fitness market."

The existing 51 clubs located in 44 Hilton hotels throughout the UK, as well as 7 outside the UK and 41 Express clubs in Hilton hotels worldwide, have not been sold as part of this transaction.

Ian Carter, Chief Executive Hilton International explained: "The existing health and fitness clubs in Hilton Hotels in the UK and Europe will remain an important part of our hotel operations and will now be managed locally. We will continue to focus on offering a quality health and fitness facility to Hilton guests."

The company indicated that proceeds from the sales will be used to reduce debt.

McQueen Limited advised Hilton International on the transactions.

Notes to Editors:

--1. Bannatyne's is one of the largest independently owned health and fitness club operators in the UK. The company has state of the art facilities in over 35 locations with over 100,000 members.

--2. Location of the 24 Livingwell Premier clubs sold to Bannatyne's -- Ashford, Barnsley, Birmingham, Brindley Place in Birmingham, Bristol, Burton on Trent, Cardiff, Carlisle, Newcraighall in Edinburgh, Glasgow, Inverness, Leicester, Luton, Maida Vale in London, Manchester, Millbank in London, Milton Keynes, Perth, Peterborough, Russell Square in London, Solihull, Sutton Coldfield, Tamworth and York.

--3. Location of the 3 Australian LivingWell Premier clubs being sold to Fitness First -- Carindale in Brisbane, Mermaid Waters in Gold Coast and Willoughby in Sydney.