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ITT rejects Hilton bid
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February 12, 1997: 5:57 p.m. ET
Company calls $6.5 billion unsolicited offer 'inadequate'
From Correspondent Rhonda Schaffler
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NEW YORK (CNNfn) -- Surprising no one, ITT Corp. Wednesday rejected Hilton Hotel's $6.5 billion unsolicited takeover offer.
Calling it "inadequate," ITT said accepting the offer was not in the best interest of ITT shareholders.
Despite the fact that ITT blew off its latest offer, Hilton is hoping the company's board will eventually hear its case.
"While we still hope that ITT will ultimately sit down and talk with us, we have also been quite clear in our commitment to making this transaction a reality, including taking the matter directly to ITT's shareholders," the company said in a statement.
David Wolfe, gaming and lodging analyst at Oppenheimer, is convinced that Wall Street is preparing for a showdown between Hilton's Chief Executive Officer Stephen Bollenbach and ITT Chairman Rand Araskog.
"I think this is setting up to be quite a battle in the corporate world. It's the Evander Holyfield-Mike Tyson battle of the corporate world," Wolfe said.
Hilton could try delivering a knockout blow by immediately raising its bid for ITT, the owner of the Sheraton Hotels chain and Caesars Resorts and Casinos.
The company said it is more likely to win control of ITT's board through a proxy contest.
Thomas Ryan, senior gaming analyst at Bankers Trust, said that means ITT's best defense is biding time by delaying its annual meeting, normally held in May. (144K WAV) or (144K AIFF)
Since Bollenbach's request to meet with ITT have been rejected so far, keeping him away from the board would give ITT time to find buyers for its non-core assets.
Analysts say ITT could get least $1 billion by selling Madison Square Garden and other businesses unrelated to hotels and casinos. That could boost ITT's stock price enough to keep shareholders content with current management.
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