Analysts cautious over Ladbroke-Hilton deal

City analysts this week played down speculation that the Ladbroke Group is poised to finally tie the knot with the US-based Hilton Hotels Corporation.

Ladbroke, owner of the Hilton name outside the USA, signed a marketing alliance with the US group last year. Many observers expected that a full merger would follow.

Last week Hilton Hotels announced that talks with US casino company Circus Circus had collapsed. Speculation that Hilton Corporation's chief executive Stephen Bollenbach would turn his focus to Ladbroke sent shares soaring, but neither company would confirm the rumours last week.

Analyst Simon Johnson of BZW thought a merger was unlikely. "Everyone has been speculating wildly," he said.

But Mark Finnie, leisure analyst for NatWest Markets, said that hopes of a full merger could simply be premature. "Ultimately it's not out of the question, but in the short term there may be disappointment," he said.