After months of resisting Hilton Hotel's uninvited $11.1 billion buyout offer, ITT Corp. said Monday it has agreed to a $13.3 billion bid from the real estate investment concern Starwood Lodging.
Starwood Lodging owns the Westin hotel brand and is one of the world's biggest real estate investment trust concerns.By combining with ITT, whose properties include Sheraton hotels and Caesars casinos, Starwood would control one of the world's biggest hotel companies with some 650 hotels in 70 countries and revenues of more than $10 billion.
Starwood is offering $82 a share in cash and stock for ITT shares. Its offer includes $15 a share in cash and the remainder in Starwood shares.
Hilton Hotels has offered $70 a share in cash and stock for ITT with 50.1 percent of the offer in cash.
There was no immediate reaction from Hilton, based in Beverly Hills, Calif. A call to its office before business hours went unanswered.
Starwood and ITT said they expect to save about $100 million a year from sharing technology and reservation systems and by purchasing services and promoting each other's hotels as well as through other efficiencies arising from the merger.
The deal is expected to close in the first quarter of 1998, subject to approval from shareholders, gaming regulators and antitrust officials.
Starwood's Barry S. Sternlicht will continue as chairman and chief executive of the combined companies. Sternlicht said Starwood intends to retain "a significant number of ITT senior executives" after the deal is completed.
ITT's chairman and chief executive, Rand Araskog, is expected to be named as one of four ITT representatives on the Starwood board.
"This is the right structure for our assets, the right transaction for our shareholders, and the right opportunity for our employees," Araskog said.
Sternlicht said the deal "complements our current holdings in every part of the world by strengthening our presence in key markets, including Europe, Latin America and Africa."
He said the combination of Starwood, Westin and Sheraton will create the leading hotel company appealing to upscale travelers.
ITT owns Sheraton, which owns, manages and franchises 424 hotels in 62 countries; Caesars, a leader in the gaming industry; and ITT World Directories.