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HHC to finalise Hilton Group deal this year

22 December 2005

Hilton Hotel Corporation's (HHC) £3.6b takeover bid for Hilton Group's hotel division is expected to complete by the end of this month, Caterer can exclusively reveal.

After several months of discussions between the two businesses, it is understood that a deadline of 29 December has been set to finalise the deal one way or the other.

Hilton Group corporate affairs director Alex Pagett said: "We remain optimistic about the talks.

"It is not unrealistic to assume that things will come to a head in a matter of weeks rather than months."

Hilton Group chief executive David Michels was earlier reported to have said the odds on a successful deal with the US company were 50:50, but several industry insiders contacted by Caterer said success now looked likely.

Pagett explained the talks had taken a long while, because it was a "complicated deal involving 80 countries with hotels under management, ownership, leases and franchises".

"If there was any way of doing this faster, we would be doing it faster," he added.

It is not yet known exactly how many redundancies would result from a successful HHC takeover, but about 60 staff at the group's Watford headquarters are expected to be offered job transfers to Hilton Group's betting division, Ladbrokes, or to HCC.

Michels and his deputy, Brian Wallace, are also thought likely to depart the company.

"If the deal goes through then it is unlikely that any merged company would need two chief executives," said one industry insider.

"There may be some short-term initiatives in which some people would stay involved."

Should the deal go ahead, Michels is expected to cash in £10-£12m in share options.

The Hilton business split in 1964, with the US company running hotels in the USA and the UK company operating the brand elsewhere.

By Jessica Gunn

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