Rumor of Possible Japanese Offer Propels Hilton Stock

From a Times Staff Writer

Hilton Hotels Corp. stock jumped $6.625 a share to $42.125, or 19%, in heavy trading Wednesday on rumors that a group of Japanese investors may bid $75 a share, or $3.6 billion, for the Beverly Hills-based firm.

Financial columnist Dan Dorfman reported on CNBC cable network on Tuesday that efforts were being made to put together a group to bid for the firm. The stock gained $2.25 a share Tuesday.

But James Galbraith, Hilton’s senior vice president of corporate affairs, said the firm had not been contacted by any group and isn’t for sale. “We don’t know anything about it,” he said.

Hilton, which owns or franchises 271 hotels and inns throughout the United States, has been struggling with soft occupancy rates. The company put itself up for sale in August, 1989, sending the stock as high as $115.50. But faced with a growing credit and real estate crunch, Hilton withdrew its for-sale sign in March. The stock plunged as low as $26.375 recently.


At least one Japanese company, ANA Hotels, part of All Nippon Airways, was approached about a year ago to buy Hilton but did not pursue the opportunity.

Although the Japanese have shown great interest in U.S. hotel and resort properties, many analysts dismissed the Hilton rumors. Investment bankers say there are few buyers--even in Japan--with cash or borrowing power of $3.6 billion today, given the extremely tight credit situation.