Analysts differ on success of Hilton bid

Thursday, Oct. 16, 1997 | 9:39 a.m.

Deutsche Morgan Greenfell analyst Jim Murren predicted that ITT will increase its tender offer to $80 a share within the next week to 10 days and would be successful in fending off Hilton's bid.

But Smith Barney & Co. analyst Harry Curtis said Wednesday that Hilton's $11.5 billion bid would be approved by ITT's shareholders at an annual meeting Nov. 12.

Murren said Hilton blew a golden opportunity to acquire ITT last January, when its stock was trading at $43 a share.

"It was a brilliant move to try to acquire ITT," he said. "If Hilton had bid $70 a share then, it would be a done deal. But they bungled it badly by bidding only $55 a share initially, because that gave ITT time to put together its defense."

Faced with Hilton's $70-per-share cash bid for 50.1 percent of ITT common, along with a stock swap for the remainder and assumption of debt, ITT launched its own offer to buy back up to 30 million of its shares for $70 each.

ITT's defensive strategy also calls for splitting the company into three parts, spinning off the hotel-casino and technical-schools businesses as "dividends" to shareholders and retaining a telephone directories unit as the core company.

"I think ITT will prevail on the financial merits of its plan," Murren said. "And when it does, Hilton will break itself up" into a real estate investment trust for hotel properties and a corporation operating gaming resorts.

ITT Corp. Vice President Jim Gallagher said, "Between now and our annual meeting, you're going to be hearing a rumor an hour and we're going to decline to comment on the rumors. "Our board and management are looking at a number of ways to enhance shareholder value and when there's something to announce, we'll announce it."