Hilton, ITT Open Talks on Takeover Bid

ITT Corp. and Hilton Hotels Corp. ended their nine-month takeover stalemate, launching a round of discussions about combining their hotel and casino operations. The move came two days after Beverly Hills-based Hilton raised its unsolicited bid for ITT to $9.3 billion, rivaling ITT’s proposed friendly $9.8-billion transaction with real estate investment trust Starwood Lodging Trust. Declaring the company was “in an auction mode,” New York-based ITT said it and Hilton had signed a confidentiality agreement and that lawyers and financial advisors met to discuss the bid. Company executives did not participate in the discussions. ITT President Robert Bowman said the talks were aimed at enabling the ITT board of directors, which is to meet next Wednesday, to fairly consider the Hilton bid. “There is no question that they [Hilton] have put a bona fide offer on the table that is, in the eyes of many, close to the Starwood offer,” Bowman said. ITT also was quick to describe the talks as discussions, not negotiations. ITT’s existing pact with Starwood includes a $195-million breakup fee to be paid if ITT solicits other bids. ITT, which has acknowledged receiving interest from other parties, said it is considering only the Hilton and Starwood offers. Hilton had no immediate comment on the talks with ITT. In New York Stock Exchange trading, ITT shares rose $2.25 to close at $78.88; Hilton shares fell 88 cents to $30.94; Starwood shares rose $1.19 to $58.63.