Hilton returns
Associated Press
to ITT bidding warNEW YORK -- Hilton Hotels Corp. raised its bid for ITT Corp. today, intensifying a bidding war with Starwood Lodging Trust for the hotel and casino company. Hilton's new offer of $80 a share in cash and stock for ITT is lower than the $82 a share offer that ITT management agreed last month to accept from Starwood, the nation's largest real estate investment trust.
But Hilton argued its offer is the better one because it includes $3.3 billion more cash than Starwood is offering.
It also is less vulnerable than Starwood's bid to drops in the value of its stock price.
With about 118 million ITT shares outstanding, and options outstanding for an additional 7 million shares, Hilton's new offer is worth about $10 billion while Starwood's bid is valued at about $10.25 billion.
ITT owns Sheraton, which owns, manages and franchises 424 hotels in 62 countries; Caesars, a leader in the gaming industry; and ITT World Directories.
Hilton's properties include Hilton hotels and Bally's casinos. Starwood Lodging agreed to buy the Westin hotel brand in September.
The combination of ITT and Starwood would create the world's largest hotelier, bringing some 650 Sheraton, Westin and Caesars hotels and casinos in 70 countries under the control of one corporation.
(In Hawaii, ITT's Sheraton manages eight hotels with 5,970 rooms; Hilton manages three hotels. It owns half of the 2,500-room Hilton Hawaiian Village, is a part owner of the Hilton Waikoloa Village on the Big Island and has a management contract for the Turtle Bay Hilton Golf & Tennis Resort on Oahu.)
Hilton had been pursuing ITT with an uninvited takeover offer for months before Starwood Lodging, based in Phoenix, came up with its friendly bid that ITT embraced Oct. 20.
In the wake of Starwood's offer, Hilton had indicated to analysts two weeks ago that it had no plans to increase its offer of $70 a share in cash and stock. But it didn't withdraw its bid.
It sweetened its offer today in advance of a Nov. 12 ITT shareholders meeting, at which Hilton is running a slate of candidates to replace ITT's board.
Under its new offer, Hilton is proposing to pay cash for 55 percent of ITT's shares and stock for the remainder, making the bid worth $44 a share in cash and $35 in stock.
Starwood's offer includes $67 a share in stock and $15 a share in cash.
Hilton chief executive Stephen F. Bollenbach said Hilton's revised offer "is clearly superior" to the Starwood bid because "it brings more value, more certainty" and other significant advantages to ITT shareholders.
He said the advantages include Hilton's operating experience in both lodging and gaming operations and the probability of saving money and operating more efficiently by combining their operations.
