Hilton Hands Out a lb4.2bil Leaving Gift
By Tessa Thorniley, Daily Mail, London
Knight Ridder/Tribune Business News
LONDON, UK, February 24, 2006. Hilton Hotel Group left a lb4.2bn parting gift to shareholders ahead of its official change of identity today. The special dividend -- equivalent to 240p a share -- is one of the biggest in recent corporate history. It follows last year's lb3.3bn sale of the hotels arm to Hilton Corporation in the US, leaving the "rump" Ladbrokes betting arm as a standalone Footsie company. The bumper special dividend, due in April, is eclipsed only by Unilever's lb5bn cash return to investors in 1999.
Hilton boss David Michels and finance director Brian Wallace, who found themselves suddenly out of work yesterday as the US deal went through, handed over to Chris Bell, who stepped up as Ladbrokes chief executive. The pair will not be twiddling their thumbs for long. They are heading to the US to act as advisers to Hilton Corporation as it swallows the 400-plus hotels, earning them up to lb15m. Bell will be left in the UK fending off the circling bidders for the standalone bookie.
Private equity group CVC tabled a lb3.6bn offer. It was batted away by the old Hilton board because it contained too many preconditions and undervalued the business. Putting up the defences, Bell said: "We are not just hopeful, we are confident that we will remain independent." He has plans to take the brand "travelling" into China and across Europe. He is also exploring opportunities in the US that do not breach the American ban on online gambling.
Analysts said that based on "weak" full-year results yesterday showing a 3pc dip in Ladbrokes" UK retail profits to lb208m the bookie is wide open to bidders. Bell said the forthcoming World Cup will be "the most bet- on event ever." Ladbrokes made lb10m when Greece won Euro 2004.
Hilton Group full-year pretax profits were up 5pc at lb394m of lb11.5bn.
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Copyright (c) 2006, Daily Mail, London
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