Golden Nugget Will Bid for Hilton Chain : But Chairman of Hotel Corporation Calls Proposal Inadequate

Golden Nugget Inc., the hotel and casino operator, said today that it is seeking to acquire Hilton Hotels Corp. in a deal worth an estimated $1.95 billion.

In separate announcements, Las Vegas-based Golden Nugget said it will make the takeover bid and Barron Hilton, chairman of Beverly Hills-based Hilton Hotels, rejected the proposal as inadequate.

Golden Nugget said it is initially seeking to buy 6.78 million shares of Hilton stock from the estate of Conrad N. Hilton for $72 per share, for a total of about $488 million.

That would be one-fourth of Hilton’s common stock.

If it succeeds in that offer, Golden Nugget said, it will offer the same price for the rest of Hilton Hotel’s stock.

Gaming License Cited

Hilton’s stock closed in composite trading on the New York Stock Exchange on Tuesday at $63.75.

“We believe that the acquisition of a significant interest in Hilton would be beneficial to Hilton and its stockholders, particularly in light of recent developments in New Jersey,” said Stephen A. Wynn, chairman and chief executive of Golden Nugget.

Hilton was recently denied a license for a major gambling property in Atlantic City.

Golden Nugget also recently pulled out of plans to develop a second Atlantic City hotel.

Wynn said Golden Nugget’s offer would increase income to the Conrad N. Hilton Foundation to an estimated $60 million, up from its current level of about $12 million a year.

However, in a brief response, Barron Hilton, who had previously exercised an option to buy Conrad Hilton’s stock, termed Wynn’s proposal inadequate.

The Nugget said its offer is good through next Friday and is not subject to arrangement of outside financing.