Hilton Group may be acquired by US-based Hilton Hotels Corp.

Hilton Group may be acquired by US-based Hilton Hotels Corp.

	Published : Fri, 14 Oct 2005 19:05 By : Amy Watts Print this Story

Hilton Hotels Corp of the US has indicated that it might takeover Hilton Group PLC, which manages and franchises 2,300 Hilton hotels world-over excepting the United States.

"The board confirms that it has received an indicative offer from Hilton Hotels Corp. which it is currently evaluating," said the London-based company’s authorities. Deutsche Bank AG is said to be advising the British outfit on the talks. The deal, if it goes through, would be worth 3.6 million pounds.

This news excited stockbrokers at FTSE as Hilton Group's shares rose sharply by about 14 percent to 350 pence by 0315 EDT. "This is fantastic news, it is the best thing to happen for Hilton's shareholders," said a financial analyst.

Hilton reported a dip in half-year net profit last month but sounded optimistic about a steady growth in the future. Hilton also operates Ladbrokes betting chain across Britain along with Hilton Hotels Corp.'s lodging properties including the Embassy Suites, Double Tree and Hampton brands.

If the hotels are sold, Ladbrokes would be operated separately as a quoted company. It would be reportedly worth 3.7 billion pounds and will continue its stay in FTSE-100, sources said. Chris Bell, chief executive of this division, would then be able to run it more independently as it was said to be his long-time ambition.

Hilton Hotels Corp. has been managing hotels only in the United States since 1964, when it sold off its non-US businesses. In the 1990s, the two companies came together to jointly handle marketing, reservations and loyalty card programmes. They also operate a joint venture of the Conrad brand which has about 20 hotels.

Their close relations would pre-empt any counter bids, feel analysts. The U.S. Hilton company was encouraged to approach Hilton Group PLC because of an improvement in the U.S. hotel market scene, it is said. Hilton Hotels has been able to more than double its profit in the second quarter after hiking room rates.

UK Hilton's Chief Executive David Michels of UK Hilton was always open to talks about a deal with Hilton Corp, said the company sources. He was for the demerger of the group if it appealed to his shareholders, it is said.