THE HILTON ITT WARS
CASE 46
The Hilton—ITT Wars
Professor William Z Ripley of Harvard, the leading authority on corporations in the
1920s, warned President Calvin Coolidge that "prestidigitation, double-shuffling, honeyfugling, hornswoggling, and skulduggery" were threatening the entire economic system.
Plus Ca change, plus c 'est la même chose.'
—Rand V Araskog, CEO of ITT
Surprised by the announcement of ITT Corporation's (ITT) restructuring proposal, on July
17, 1997, Matthew J. Hart, the chief financial officer of Hilton Hotels Corporation
(Hilton), reviewed the valuation analysis of ITT (see Appendix) and pondered the next step in his firm's hostile tender-offer contest for ITT. Hilton had commenced the tender offer on January 27, 1997. The financial community had responded favorably, but ITT's management had resisted firmly, selling assets and even refusing to call an annual meet.. ing. Because ITT had a strong "poison-pill" antitakeover defense in place, it would be necessary to replace I'IT's board and for that board to rescind the poison-pill defense before
Hilton could .onunmate its purchase of ITT. But IT!' had delayed calling an annual meeting at which a new board could be elected. In the six months since the initiai rilion offer, ITT had developed its "trivestiture" proposal, which it hoped would successfully fend off Hilton.
'Rand V. Araskog, The fiT Wars (New York: Henry Holt and Company, 1989), 228.
This case was prepared from public information by Sanjay Vakharia under the direction of Professor Robert F.
Bruner. Copyright0 1998 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved. To order copies, send an e-mail to dardencases@virginia.edu . No part qf the's publication may be reproduced, stored in a rerrie,'al sys:ee'n. used in a spreadsheet, or transmitted in any form or by crow means---electronic. mechanical, photocopying, recording, or otherwise—without the permission of the Darden Sc/cool Foundation.
Rev. 11/0 1.
The Hilton—ITT Wars
Professor William Z Ripley of Harvard, the leading authority on corporations in the
1920s, warned President Calvin Coolidge that "prestidigitation, double-shuffling, honeyfugling, hornswoggling, and skulduggery" were threatening the entire economic system.
Plus Ca change, plus c 'est la même chose.'
—Rand V Araskog, CEO of ITT
Surprised by the announcement of ITT Corporation's (ITT) restructuring proposal, on July
17, 1997, Matthew J. Hart, the chief financial officer of Hilton Hotels Corporation
(Hilton), reviewed the valuation analysis of ITT (see Appendix) and pondered the next step in his firm's hostile tender-offer contest for ITT. Hilton had commenced the tender offer on January 27, 1997. The financial community had responded favorably, but ITT's management had resisted firmly, selling assets and even refusing to call an annual meet.. ing. Because ITT had a strong "poison-pill" antitakeover defense in place, it would be necessary to replace I'IT's board and for that board to rescind the poison-pill defense before
Hilton could .onunmate its purchase of ITT. But IT!' had delayed calling an annual meeting at which a new board could be elected. In the six months since the initiai rilion offer, ITT had developed its "trivestiture" proposal, which it hoped would successfully fend off Hilton.
'Rand V. Araskog, The fiT Wars (New York: Henry Holt and Company, 1989), 228.
This case was prepared from public information by Sanjay Vakharia under the direction of Professor Robert F.
Bruner. Copyright0 1998 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved. To order copies, send an e-mail to dardencases@virginia.edu . No part qf the's publication may be reproduced, stored in a rerrie,'al sys:ee'n. used in a spreadsheet, or transmitted in any form or by crow means---electronic. mechanical, photocopying, recording, or otherwise—without the permission of the Darden Sc/cool Foundation.
Rev. 11/0 1.