The Caterer

Hilton Group confirms HHC offer for hotel division

14 October 2005
Hilton Group confirms HHC offer for hotel division

Hilton Group is in talks with US-based Hilton Hotels Corporation (HHC) about the sale of its hotel division for £3.6b.

The deal, which would see the reunification of the two companies, does not include Hilton Group's Ladbrokes betting arm.

A Hilton spokeswoman said: "The board confirms that it has received an indicative offer from HHC, which it is currently evaluating. Discussions are ongoing and subject to the resolution of a number of issues."

The due diligence process will reportedly take a further two months.

The two brands, which split in 1964, currently operate a strategic global alliance that covers branding, marketing and loyalty schemes. HHC operates more than 2,300 hotels in the US and Hilton Group has more than 400 sites in 80 countries.

Analysts speculated Hilton Group's ongoing sale of its bricks and mortar has made the asset-light company attractive to US investors.

The deal may also have been prompted by HHC's improved financial health.

Hotel analyst Melvin Gold said: "Both groups already have most of the benefits from their strategic alliance. The advantages of this deal are not entirely obvious. Perhaps it's about returning a chunk of cash to shareholders."

By Tom Bill

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