London Tabloid Reports Hilton Merger is Looking Good
LONDON, UK, December 19, 2005. A report in yesterday's London Telegraph says that a lb3.6billion takeover of Hilton Group's hotels division by Hilton Hotels Corp. could be announced early next month apparently after major obstacles to a deal have been resolved. Hurdles, including pension and tax issues, and some key management changes, have been agreed to, according to the paper.
David Michels, chief executive of Hilton Group, has said that the odds on a deal with the U.S. company were 50-50. But one adviser this weekend said the chances "are now much better than that." He said that the two sides are thought to be planning an announcement by mid-January "either that a deal has been done or that it is time to break off the talks. But things have been progressing well."
Another source said: "A deal is more likely than not.", the Telegraph report adds.
In further comment, the Telegraph says two months of talks had become bogged down on Hilton Group's many hotel franchise agreements and tax liabilities. There has also been the issue of the future of Hilton' top executives.
Brian Wallace, the deputy chief executive and finance director, is understood to be negotiating a transitional role within the new merged hotel group, though there is likely to be no lasting position. Other Hilton executives are likely to join the stand-alone Ladbrokes business, though it is understood that this will not include Michels.
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