Kathy Hilton Says She ‘Couldn't be Mad’ the First Time She Saw Grandson Phoenix: 'So Happy' (Exclusive)

"I totally understand," Kathy told PEOPLE of her daughter Paris keeping her son's arrival a secret

Kathy Hilton is getting candid about being kept in the dark about her grandson Phoenix Barron’s arrival.

Speaking exclusively to PEOPLE at her Annual Holiday Pajama Party at her Beverly Hills home on Monday, Kathy, 64, shared that she “couldn’t be mad” at her daughter Paris Hilton for keeping the little one a secret because she “was so happy and so in shock” when she first met him.

“I was so excited and so in shock,” she told PEOPLE. “In a perfect world, would I have loved to have been part of the journey? Yes. But she said, ‘Mommy, if you are at the hospital, people are going to recognize you. Then they're going to all put all this.’ ”

“When you are having a surrogate, you have to be thoughtful of their privacy as well,” the Real Housewives of Beverly Hills alum continued. “So I totally get it. I totally understand. Paris is a grown woman, and I've said this, this is she and Carter. This is their decision.”

Paris and her husband Carter Reum welcomed Phoenix via surrogate in January and only shared their baby news with Paris’ family when he was 8 days old.

Related: Kathy Hilton Says Daughter Paris Is ‘Over the Moon’ to Be a Mom: ‘Never Seen Her So Happy’ (Exclusive)

The couple then surprised their nearest and dearest once again on Thanksgiving, this time revealing that they had become parents of two together and had welcomed a baby girl named London.

“I'm just happy and blessed that I have a beautiful grandson and a beautiful granddaughter,” added Kathy. “I would've loved to have been a part of all that, but you know what, it's none in my damn business. I got to just stay in my lane.”

Viewers saw the emotional moment Kathy met Phoenix for the first time during season 2 of Paris’ Peacock reality show, Paris in Love, which premiered last week.

Related: Paris Hilton Debates Letting Mom Kathy Hilton In on Baby News with Daughter London: 'It's a Hard Decision'

As Paris walked into her living room holding Phoenix in a navy blue blanket, a tearful Kathy asked, “You’re joking?”

Shaking her head, Paris responded, “This is your grandson, Phoneix Barron Hilton Reum.”

“Are you serious? Paris, are you serious? Oh my God,” added Kathy, as she cried.

“I just feel like my life has been so public and I just didn’t want to have the media and people talking about my son before he was born,” said Paris, explaining her decision to keep her son’s birth a secret. “I’m sorry I didn’t tell you before but this is my baby.”

“Paris he is so gorgeous,” continued Kathy. “I cannot believe it. Paris, this is the most special, most exciting thing in life. Your whole life is going to change because this is what matters.”

Meanwhile, Paris opened up about surprising her family with London’s arrival during their Thanksgiving celebrations during an appearance on Live with Kelly and Mark last week.

"Thanksgiving was amazing,” said the heiress and DJ. "Of course, that's when I surprised the whole family with London!"

Co-host Mark Consuelos then asked Paris if she said, "Pass the turkey, here's London," to which all three laughed.

"It was before the turkey. This was around like 5 o'clock at night and Carter got everyone in the living room," she explained. "He's like, 'Oh, I have a surprise.' Everyone thought a magician was coming, like, 'We have a performer coming in!' "

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"Everyone's so excited and then I just walk in carrying a pink blanket with the baby and everybody is sitting there like, 'What?!'"

Paris’ brother Barron Hilton also opened up to PEOPLE about the unexpected moment during his mother’s event, DirecTV Celebrates Christmas at Kathy’s, at her home last week.

“We had no idea,” said Barron. “So that was quite the surprise but we're so happy for them.”

“They said that they were bringing a magician out and then there was this pink little bundle,” added his wife, Tessa Hilton, who is expecting the couple's third baby in March.

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