Mississippi approves ITT reorganization

Tuesday, Sept. 16, 1997 | 11:36 a.m.

Attorneys for Hilton Hotels Corp., which is attempting a $11.5 billion takeover of ITT, said the passage was expected. The two companies also go before a federal judge in Nevada later this month.

Gaming commissions in Nevada and New Jersey have scheduled meetings this week on the ITT reorganization, which was passed unanimously by the Mississippi Gaming Commission. Approval was sought because the New York-based ITT does business in Mississippi.

ITT, which owns Caesars World resorts and the Sheraton chain including Sheraton Casino in Tunica, wants to split its holdings into three divisions and borrow money for new investments.

Under the split announced in August, ITT's hotel business will be called ITT Destinations Inc., its telephone directory business will become Information Services Inc. and the business part of ITT's technical schools will be called Educational Services Inc.

Hilton, which will likely drop its bid for the company if the spinoff is successful, tried to convince the Mississippi Gaming Commission not to endorse ITT's plans.

"You can't just sit on the fence and say 'you guys fight it out' every time," said Jackson attorney Dan Hise, who told the three-member commission "you're not going to see as big a transaction as this one and as meaningful."

Hise classified the ITT reorganization as "irrational" and said Mississippi would not benefit.

Tom Gallagher, general counsel for Hilton, said the decision will "set the standard in Mississippi, New Jersey, Nevada."

Gallagher said he was not surprised by the commission's decision.

"The main event is going to be in Nevada," he said, referring to a federal court hearing Sept. 29. "This ruling assumes that the plan is legal."

The main criticism in the meeting was that ITT has not gotten shareholder approval for the split.

"You can take a dead rat and put a ribbon around it, and it's still a dead rat," Hise said.