ITT to Sell 5 Sheraton Hotels to FelCor Suites
ITT Corp., which is trying to thwart a $6.5-billion hostile takeover by Hilton Hotels Corp. by selling assets, said Monday that it will sell five ITT Sheraton hotels to FelCor Suites Hotels Inc. for $200 million in cash.
Under the agreement, ITT will manage the hotels for 20 years and work with FelCor to identify other potential acquisitions.
The hotels, with more than 1,800 rooms total, are the Sheraton Gateway Hotel Atlanta Airport in College Park, Ga.; Sheraton Suites Galleria in Atlanta; Sheraton Gateway Suites O’Hare Airport in Rosemont, Ill.; Sheraton Crescent Hotel in Phoenix; and Sheraton Park Central in Dallas.
ITT said it expects the transaction to close by the end of June. FelCor, based in Irving, Texas, said it will raise the $200 million in a securities offering.
The move is ITT’s latest bid to fend off Hilton by selling assets, but the biggest part of its defense strategy lies ahead. ITT is expected to generate more than $2 billion in coming months by selling assets, including a telephone directory business and an educational services unit.
The proposed transaction drew fire from Beverly Hills-based Hilton, which said the move represents ITT’s desire to discourage its offer at all costs.
Hilton launched its unsolicited $55-a-share bid in January. Since then, ITT has announced the sale of its stake in French telecommunications company Alcatel Alsthom, its 50% stake in Madison Square Garden to partner Cablevision Systems Corp. and its 50% stake in TV station WBIS to Paxson Communications Corp.
Shares of ITT rose 12.5 cents to close at $59.50; Hilton shares gained 50 cents to close at $29.875. Both trade on the New York Stock Exchange.
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