Hilton Hotels Prepares For Battle To Take Control Of Itt

Hilton Hotels Corp on Tuesday named 25 candidates for ITT Corp.'s board of directors, preparing for a fight to control the board as part of its $6.5 billion takeover bid.

Hilton also repeated its desire to meet with ITT to discuss its $55-a-share cash-and-stock bid, but Hilton's tone grew more terse and businesslike.

In a sharply written letter to ITT chairman Rand Araskog, Hilton chief executive officer Stephen Bollenbach warned that if the New York-based hotel and casino operator took measures to reduce the proposed merger's value, Hilton would simply counter by lowering its offer price.

Bollenbach also addressed Araskog as Mr. Araskog, avoiding the friendly salutation Dear Rand he used in an earlier letter.

 

We do not intend to be deterred from pursuing our offer by any actions that you may choose to take, Bollenbach wrote.

He said the initial response from company shareholders and Wall Street analysts to Hilton's offer was overwhelmingly positive.

Hilton's proposed slate of board members includes executives from the hospitality and gambling industries, private investors and former New Jersey governor James Florio.

Also included are Robert Kingsley, a former president and chief operating officer of Caesars World Inc which is now owned by ITT, and Russell Jones, a vice president at real estate investment banking firm Sonnenblick-Goldman Co based in Los Angeles.

Hilton said 11 of the individuals would be named to a slate of candidates for ITT's current board seats, and the other 14 could be added if ITT attempts to thwart Hilton's bid by boosting the number of board members.

Hilton planned to file documents with the Securities & Exchange Commission yesterday separating those who will be put on an 11-member slate from the other 14. A spokesman for ITT declined to comment on Hilton's move.

ITT has not scheduled its next annual shareholder meeting at which all ITT board members are scheduled for re-election. ITT normally holds its annual meeting in mid-May.

Financial analysts said investors and shareholders will next look to ITT's response to the Hilton offer, which must come by Friday under SEC regulations.

ITT has several options at its disposal, including making an acquisition that would dilute earnings and thus make an acquisition less attractive.

It could also invoke its poison pill which would also make the deal less appealing.

ITT Corp.'s board of directors met last week but took no action on the unsolicited takeover offer from Los Angeles-based Hilton, which also calls for the assumption of about $4 billion of ITT debt.