Transworld Sells Hilton Subsidiary : European Firm Pays $975 Million for International Hotels
Transworld Corp., the New York-based hotel and food company that announced last month that it was liquidating itself, said Wednesday that it has sold its chain of 90 Hilton International hotels to a European company for $975 million.
No buyer was identified for Hilton International. But industry speculation late Wednesday centered on London-based Trusthouse Forte PLC, which operates about 750 hotels in Europe and the United States. There were also reports that European hoteliers believe that the buyer was KLM, the Dutch national airline.
Other large European hotel companies include Accor of Paris and the London-based Imperial Group, which recently sold its Howard Johnson hotel and restaurant group. Hilton International is the world’s 17th-largest hotel chain as ranked by Hotel & Restaurants International, a trade journal.
The sale is subject to the approval of the European company’s supervisory board and review by U.S. regulatory officials.
The international hotel industry has been hurt in recent months by the weakness of the dollar against many foreign currencies and lingering public concern about international terrorism, said Andrew B. S. Kim, an analyst at Eberstadt Fleming in New York.
Price Expected
But he said the purchase “price was in line with what most people were expecting” since the company had already publicly disclosed that it had given an investor an option to purchase the chain for $1 billion.
Philip Reilly, assistant comptroller for Transworld, said that after expenses from the transaction, the sale of Hilton International would be worth “a little over $20 a share” to holders of its 48.5 million shares.
At the time of the liquidation announcement, Transworld said it had given an option to corporate raider Ronald Perelman to purchase Hilton International for $1 billion. The liquidation was begun after Perelman had launched a takeover bid for Transworld.
Although under its agreement with Perelman, Transworld had agreed to pay him $10 million or 25% of any sale amount over $1 billion, whichever was greater, Transworld said Wednesday that Perelman, chairman of Revlon, has agreed to terminate his purchase option and waived his rights to any payments in connection with a sale of Hilton International.
Transworld was severed from Trans World Airlines in 1979 and set up as a separate corporation. It owns 90 Hilton International hotels, mostly overseas. The Hilton International hotels were spun off 22 years ago by Beverly Hills-based Hilton Hotel Corp. The Beverly Hills company still operates 278 hotels and is the world’s third-largest hotel chain behind Sheraton Corp. and Holiday Corp.
