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Hilton chief feels 'used'
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November 6, 1997: 8:56 p.m. ET
Stephen Bollenbach blasts ITT Corp. board for its "unfair" treatment
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NEW YORK (CNNfn) - Negotiations between Hilton Hotels Corp. and ITT Corp. came to a screeching halt Thursday when Hilton withdrew from the talks and accused ITT of favoring a rival bid from Starwood Lodging Trust.
In an unusual development, Hilton Chief Executive Stephen Bollenbach charged ITT's board of directors with witholding information and rigging the process against Hilton.
"Frankly, I felt we were being used," Bollenbach said in an interview at the Waldorf Astoria Thursday. "We just don't want to deal with the ITT board …Every step of the way, they've made it clear they don't respect the shareholders."
Rather than continue to talk to ITT, Bollenbach said Hilton would focus on replacing ITT's board with its own slate of directors at a key shareholder's meeting on November 12. However, if ITT's board prevails, Bollenbach insisted his company will walk away for good.
In an interview on "Moneyline with Lou Dobbs" ITT President Robert Bowman denied ITT had withheld information from Hilton and he said the company's board of directors believe both bidders can go higher. (131K WAV) or (131K AIFF)
In January, Hilton offered to acquire ITT for $55 a share but the proposal was quickly rejected. The company raised its bid to $70 a share in July, but that too was rejected. Then, earlier this week, Hilton raised its bid again to $80 a share for 55 percent of Hilton and the rest in stock.
The latest move put Hilton within striking distance of Starwood Lodging's offer of $9.8 billion or $82 a share, prompting ITT to announce on Tuesday that it was in auction mode.
While the bidding has been confined so far to Hilton and Starwood, Bowman said ITT is not ruling out the possibility that a third bidder may emerge. (126K WAV) or (126K AIFF).
ITT did not identify the third parites but Reuters reported buyout firm Kohlberg Kravis Roberts & Co. has expressed interest in both the Starwood and Hilton offers.
While KKR is reportedly not interested in ITT's casino operations, Reuters said KKR may seek to invest cash into either Starwood or Hilton, or form a pact to buy other ITT assets.
Mirage Resorts Inc. reportedly has also expressed an interest. KKR and Mirage both declined to comment.
Bollenbach on Thursday demanded ITT release a list of possible third parties interested in all or part of ITT.
"I've asked ITT to tell Hilton who they're talking to," Bollenbach said.
ITT has indicated its board needed more time beyond the November 12 date to select the best offer. But, analysts said investors have waited long enough.
"I think all shareholders should have a healthy skepticism over the ITT board. The fact that they now have religion doesn't change their past discretions," said Bruce Turner, an analyst at Salomon Brothers.
"This can't go on any longer. Any tactics to delay... anything that does not close this chapter... is unacceptable. They could have done this six months ago," Turner said.
Hilton shares closed at 31-5/8 Thursday, up 9/16 while ITT shares fell 5/8 to 79-58 and Starwood slipped 1-7/16 to 58-13/16.
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