Big hotel merger discussed

Wednesday, Sept. 1, 1999 | 11:34 a.m.

LOS ANGELES -- Hilton Hotels Corp. is in discussions to purchase Promus Hotel Corp. in a deal that would be worth more than $2.4 billion, the Wall Street Journal reported today.

The paper cited unnamed sources familiar with the proposed takeover, who said participants are trying to settle the transaction shortly. However, they said negotiations could possibly fall apart.

While Hilton has expressed interest in hotel franchiser and owner Promus in the past, executives have said that Promus was too pricey, the paper said. Promus had $1.1 billion in revenues in 1998, while Hilton showed $1.8 billion for the same period.

The deal could expand Hilton's stake in the lodging industry, since Promus' interests include Embassy Suites, Doubletree, Homewood Suites and Hampton Inn. If Hilton acquired Promus, it would open the limited-service and all-suites segments of the travel market to Hilton.

Hilton last year spun off its gaming division into Park Place Entertainment, which is now based in Las Vegas.