ITT Corp. has rejected rival Hilton Hotel Corp.’s $6.5 billion hostile takeover bid in a widely expected move that could kick off a protracted battle for the hotel and casino owner.
ITT stock rose further above the $55 a share Hilton is offering on the news Wednesday.
Hilton wants to buy ITT to combine its Hilton hotels with ITT’s Sheraton chain and create an even larger casino operator. ITT, meanwhile, says the Hilton bid is too low and argues that combining Sheraton and Hilton would pose various operating problems. A combination of ITT, which also owns Caesars World, and Hilton would assemble the world’s largest big hotel and casino operator.
“The situation remains hostile but fluid,” said Harold Vogel, an entertainment and gaming analyst at Cowen & Co., a brokerage firm. “We think that the next step is ITT moves to pare its assets down to the core and raise cash and maybe buy back shares.”
ITT said as much in a statement, explaining it is reviewing options to increase the company’s value “including monetizing or otherwise realizing the value of ITT’s noncore assets.”
ITT shares rose $1.62-1/2 to close at $57.62-1/2 in trading on the New York Stock Exchange. Hilton was off 50 cents at $27.62-1/2.
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