Starwood May Sell ITT Educational Stake

Starwood Hotels & Resorts said it’s exploring ways to sell its 35% stake in trade-school operator ITT Educational Services Inc., worth about $258 million, to focus on hotels and casinos. Starwood acquired the stake with its $14.6-billion purchase in February of ITT Corp. and ITT’s Sheraton hotels and Caesars World casinos. Indianapolis-based ITT Educational operates 64 schools and had revenue of $261.7 million last year. Starwood, the world’s largest owner of hotels, said it might sell all or part of its remaining 9.5 million ITT Educational shares or sell securities tied to the shares. The company in June sold 13 million shares for $315 million. Starwood, a real estate investment trust, has said it will convert into a standard corporation next year in response to a new law that strips it of a tax advantage it has had as a special kind of REIT. Its shares have fallen 66% this year on concerns about how it will be affected by the new tax law and the slowing economy. ITT Educational fell $1.94 to close at $25.38 on the NYSE. White Plains, N.Y.-based Starwood fell 44 cents to close at $19.50, also on the NYSE.