Hilton Continues ITT Bid by Naming Board Candidates
Laying the groundwork for a takeover battle, Hilton Hotels Corp. on Tuesday announced its slate of 25 candidates to replace the board of directors of ITT Corp., which is scheduled to respond to Hilton’s $10.5-billion merger proposal by the end of this week.
Hilton President and Chief Executive Stephen F. Bollenbach also warned ITT, which owns the Sheraton hotel chain and Caesars Palace in Las Vegas, about trying to thwart Hilton’s bid. ITT has reportedly considered either selling off pieces of the company or merging with another firm to avert a takeover.
In a letter sent Tuesday to ITT Chairman Rand V. Araskog, Bollenbach said that “to the extent your actions reduce the value of the combination to us, we would, of course, be required to review the per-share price that we would be able to pay and, if necessary, adjust the terms of our offer.”
Araskog did not immediately respond to the letter. Since Hilton announced its takeover offer late last month, Araskog has rebuffed all requests by Bollenbach to meet and allow Hilton to make a presentation before ITT’s board.
Beverly Hills-based Hilton has offered to buy ITT for $6.5 billion in cash and stock and assume $4 billion in ITT debt. The company declined to say how many ITT stockholders have so far tendered their shares to Hilton.
Hilton said it will have its candidates placed on the proxy mailed to all ITT shareholders in advance of the company’s annual shareholders meeting, when a new board is elected. New York-based ITT has not set a date for its annual shareholders meeting, but it is usually held in May. Hilton has the right to nominate board members as an ITT shareholder. It owns more than 300,000 ITT shares.
The entire 11-member ITT board is up for reelection at the next shareholders meeting. Hilton plans to nominate 25 members in case ITT tries to expand its board as permitted under company bylaws.
Hilton’s roster of nominees includes Scott H. Bice, dean of the USC Law School; James J. Florio, former New Jersey governor; and Robert H. Wolf, former chairman and chief executive of advertising firm TBWA Chiat/Day.
