Hilton's Shareholders Approve Binding By-law Amendment to Redeem Poison Pill
BEVERLY HILLS, CA, May 24, 2006. Shareholders of Hilton Hotels (NYSE:HLT) have overwhelmingly approved a precedent-setting, binding by-law amendment to redeem the company's poison pill and require any future pills to obtain shareholder prior approval, according to UNITE HERE, the proponent of the resolution. 68% of shares voted, and more than a majority of outstanding shares, voted in favor of amending Hilton's By-Laws.
"The question posed by Hilton's poison pill is whether the board of directors will put management's interests above shareholders' interests in this transaction driven industry," stated Courtney Alexander, UNITE HERE's deputy research director. The hotel industry saw $21 billion in hotel transactions in 2005, 63% higher than in 2004, according to Jones Lang LaSalle.
"By this historic vote, shareholders are overwhelmingly telling Hilton that its existing poison pill is not in their interest, and now it is incumbent upon the Board to put aside its relationships with management, redeem its poison pill, and implement the by-law amendment. The question asked today is: will Hilton's Board honor the will of its shareholders?"
Binding poison pill amendments are untested legal ground in Delaware, where Hilton is incorporated. The Oklahoma Supreme Court, in a state whose corporate statutes on the respective powers of shareholders and the board of directors are very similar to Delaware's, held in Fleming Cos. (1999) that a similar binding by-law amendment is consistent with that state's law.
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