Hilton Hotels Corp. said Monday it won’t raise its $80-a-share offer for ITT Corp., disappointing some investors and hurting its chances in this week’s showdown with rival suitor Starwood Lodging Trust.
The fate of ITT, founded in 1920 as an international phone company, now hangs on Wednesday’s proxy contest between directors nominated by ITT and Hilton. Starwood is bidding $85 a share in cash and stock.
Some investors had expected Hilton chief executive Stephen Bollenbach to ante up a final time in his 10-month quest for the hotel and casino company. Now, some of Bollenbach’s supporters said they’re having second thoughts.
“It looks like the end for the man,” said Peter Schoenfeld, president of P. Schoenfeld Asset Management, which owns 500,000 shares of ITT and who had been leaning toward Hilton. “It’s a question of how much Starwood stock we want to own and whether we have confidence in their ability.”
Hilton said again it would drop its hostile bid if the ITT board is re-elected and amended its offer to automatically terminate if that happens. That dashed investor hopes for a bidding war.
ITT’s shareholders will vote on two slates of directors. ITT said its board, if re-elected, plans to continue to auction the operator of Sheraton hotels and Caesars World casinos, while Hilton’s nominees would support its offer.
