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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
(Amendment No. 23)
SOLICITATION/RECOMMENDATION STATEMENT
Pursuant to Section 14(d)(4)
of the Securities Exchange Act of 1934
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ITT CORPORATION
(Name of Subject Company)
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ITT CORPORATION
(Name of Person(s) Filing Statement)
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Common Stock, no par value
(including the associated Series A Participating Cumulative
Preferred Stock Purchase Rights)
(Title of Class of Securities)
450912 10 0
(CUSIP Number of Class of Securities)
RICHARD S. WARD, ESQ.
Executive Vice President,
General Counsel and Corporate Secretary
ITT Corporation
1330 Avenue of the Americas
New York, NY 10019-5490
(212) 258-1000
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Person(s) Filing Statement)
With a copy to:
PHILIP A. GELSTON, ESQ.
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019-7475
(212) 474-1000
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<PAGE>
INTRODUCTION
The Solicitation/Recommendation Statement on Schedule 14D-9
(the "Schedule 14D-9") originally filed on February 12, 1997, by ITT
Corporation, a Nevada corporation (the "Company"), relates to an offer
by HLT Corporation, a Delaware corporation ("HLT") and a wholly owned
subsidiary of Hilton Hotels Corporation, a Delaware corporation
("Hilton"), to purchase 61,145,475 shares of the common stock, no par
value (including the associated Series A Participating Cumulative
Preferred Stock Purchase Rights), of the Company. All capitalized
terms used herein without definition have the respective meanings set
forth in the Schedule 14D-9.
Item 8. Additional Information to be Furnished.
The response to Item 8 is hereby amended by adding the
following after the final paragraph of Item 8:
On July 31, 1997, plaintiffs in the purported class action
suit captioned Taub, et. al. v. Araskog, et. al., CV-S-97-00106, filed
an Opening Memorandum of Points and Authorities in Response to ITT's
Request for Declaratory Judgment (the "Taub Memorandum of Points and
Authorities"), pursuant to which such plaintiffs informed the court
that such plaintiffs consider that when the Hilton Offer is compared
to the Comprehensive Plan, the Comprehensive Plan better serves the
interests of ITT's shareholders. A copy of the Taub Memorandum of
Points and Authorities is filed as Exhibit 77 hereto and is
incorporated herein by reference.
On July 31, 1997, Hilton filed a Memorandum of Points and
Authorities in response to the Company's motion for a speedy hearing
asking the court to rule that it is premature to determine an
appropriate schedule for a hearing. A copy of such Memorandum of
Points and Authorities is filed as Exhibit 78 hereto and is
incorporated herein by reference.
<PAGE>
Item 9. Exhibits.
The response to Item 9 is hereby amended by adding the
following new exhibits:
77. ITT Shareholder Plaintiff's Opening
Memorandum of Points and Authorities in
Response to ITT Corporation's Request for
Declaratory Relief (filed in Taub, et.
al. v. Araskog, et. al., CV-S-97-00106)
dated July 31, 1997.
78. Defendant's Memorandum of Points and
Authorities in Response to Plaintiff's
Motion Pursuant to Fed. R. Civ. P. Rule 57
for a Speedy Hearing dated July 31, 1997.
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true,
complete and correct.
ITT CORPORATION
By /s/ RICHARD S. WARD
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Name: Richard S. Ward
Title: Executive Vice President,
General Counsel and
Corporate Secretary
Dated as of August 1, 1997
<PAGE>
EXHIBIT INDEX
Exhibit Description Page No.
- ------- ----------- --------
(77) ITT Shareholder Plaintiff's Opening
Memorandum of Points and Authorities in
Response to ITT Corporation's Request for
Declaratory Relief (filed in Taub, et.
al. v. Araskog, et. al., CV-S-97-00106)
dated July 31, 1997.
(78) Defendant's Memorandum of Points and
Authorities in Response to Plaintiff's
Motion Pursuant to Fed. R. Civ. P. Rule 57
for a Speedy Hearing dated July 31, 1997.
<PAGE>
[Exhibit 77]
ALBRIGHT, STODDARD, WARNICK
& ALBRIGHT
G. MARK ALBRIGHT
Nevada Bar No. 001394
WILLIAM H. STODDARD, ESQ.
Nevada Bar No. 001477
Quail Park Suite D-4
801 South Rancho Drive
Las Vegas, NV 89106
Telephone: (702) 384-7111
Counsel for ITT Corporation Shareholder Plaintiffs
[Additional counsel appear on signature page.]
UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA
ITT CORPORATION, BETTE B. ANDERSON, )
RAND V. ARASKOG, NOLAN D. ARCHIBALD, ) Civil Action No.
ROBERT A. BOWMAN, ROBERT A. BURNETT, ) CV-S-97-00893-DWH
PAUL G. KIRK, JR., EDWARD C. MEYER, ) (RLH)
BENJAMIN F. PAYTON, VIN WEBER, )
MARGITA E. WHITE, and KENDRICK R. )
WILSON, III, )
)
Plaintiffs, )
)
vs. )
)
HILTON HOTELS CORPORATION and )
HLT CORPORATION, )
)
Defendants. )
)
)
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ITT SHAREHOLDER PLAINTIFFS' OPENING MEMORANDUM
OF POINTS AND AUTHORITIES IN RESPONSE TO
ITT CORPORATION'S REQUEST FOR DECLARATORY RELIEF
Plaintiffs in the action entitled Taub, et al. v. Aroskog,
et al., CV-8-97-00106-HDM (LRL) pending in this district (the
"Shareholder Action") respectfully submit this memorandum of law in
response to ITT Corporation's request for declaratory
<PAGE>
relief.[1] (In this memorandum, plaintiffs in the Shareholder Action are
referred to as the "ITT Shareholder Plaintiffs").
PRELIMINARY STATEMENT
The ITT Shareholder Plaintiffs brought the Shareholder
Action on behalf of all stockholders of ITT Corporation ("ITT" or the
"Company") against the directors and senior officers of ITT. In the
Shareholder Action, the ITT Shareholder Plaintiffs seek to enjoin
actions taken by the defendants to thwart a takeover offer originally
made by Hilton Hotels Corp. ("Hilton") on January 27, 1997 (the
"Offer") to acquire ITT for $55 per share. The ITT Shareholder
Plaintiffs allege that defendants in the Shareholder Action were
depriving ITT's Shareholders of the opportunity to realize the full
benefits of their investment in ITT.
Since Hilton made the offer, counsel for the ITT
Shareholders have been intimately involved with the numerous steps
taken by ITT following the ITT Shareholders' claims and the Hilton
Offer. Most recently, counsel for the ITT Shareholders learned that
on July 15, 1997, ITT's Board of Directors approved a comprehensive
plan (discussed below) (the "Comprehensive Plan") after reviewing it
with the Company's management and its outside financial and legal
advisors.
The ITT Shareholders respectfully submit this memorandum
to inform the Court that the ITT Shareholders consider that when the
Hilton Offer (in its current form) is compared to
- --------
[1] ITT's motion for declaratory relief was filed in ITT, et al.
v. Hilton Hotels Corp., et al., CV-S-97-00893-DWH (RLH).
<PAGE>
the Comprehensive Plan, the Comprehensive Plan better serves the
interests of ITT's shareholders.
STATEMENT OF FACTS
1. Hilton's Tender Offer
On January 27, 1997, Hilton announced the Offer pursuant to
which Hilton would acquire 50.1% of the common stock of ITT at a price
of $55 per share, and proposed a stock merger for the rest of ITT's
common stock. In a letter written to ITT by Hilton's President and
Chief Executive Officer, Hilton stated, "that [Hilton is] committed to
making this combination a reality. Although [Hilton] would much rather
work directly with you, [Hilton is] prepared if necessary to solicit
proxies from your shareholders to replace your board of directors in
order to complete this transaction."
2. The Shareholder Action
Following news of Hilton's Offer, the ITT Shareholders filed
the Shareholder Action (Taub, et al. v. Aroskog, et al.,
CV-8-97-00106-HDM (LRL)) in this Court against ITT and its officers
and directors. The ITT Shareholders allege that ITT and the individual
defendants had failed to adequately consider the Hilton Offer and were
preparing to use their positions of control over ITT to thwart
legitimate attempts to acquire ITT. Among other things, in the
Shareholder Action the ITT Shareholders seek a permanent injunction
preventing defendants from depriving ITT's shareholders of their right
to realize a full and fair value for
<PAGE>
their ITT stock and compelling defendants to maximize shareholder
value. The Shareholder Action is still pending in this Court.
3. ITT's Response to the Hilton Offer
At a meeting on February 11, 1997, after consulting with its
legal and financial advisors, ITT's Board unanimously determined that
the Hilton Offer was inadequate and not in the best interests of the
Company or its shareholders. Every day since Hilton made its Offer,
ITT's stock has traded above Hilton's offering price.
At a meeting held on July 15, 1997, the ITT Board reassessed
the Hilton Offer in light of developments since February 11, 1997,
and, once again, unanimously reaffirmed its conclusion that the Hilton
Offer is inadequate and not in the best interests of ITT or its
shareholders. Instead, at the July 15, 1997 meeting, ITT's Board
approved a comprehensive plan (the "Comprehensive Plan") (described
below) that is designed to enhance the value of ITT to its
stockholders.
A. The Comprehensive Plan
As described in ITT's Schedule 14D-9 (Amendment No. 20),
dated July 16, 1997, the Comprehensive Plan involves:
o the separation (the "Spinoff") of ITT into
three distinct, publicly owned companies
focused on (a) hotels and gaming; (b) telephone
directories publishing; and (c) post-secondary
technical education;[2]
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[2] The separation will be effected through the distribution or
"spin-off" of all the shares owned by the Company of ITT Destinations,
Inc., a new subsidiary that was formed to hold the Company's hotels
and gaming business ("Destinations"), and ITT Education Services,
Inc., the Company's subsidiary that operates
<PAGE>
o the repurchase of up to 30 million shares
(approximately 25% of the outstanding shares)
at a price of $70 per share (the "Equity
Repurchase"); and
o the repurchase of all of ITT's publicly held
debt securities. Id.
4. The ITT Shareholders Consider
The Comprehensive Plan To Be Better For Shareholder
Value than the Hilton Offer
After reviewing the Comprehensive Plan and comparing it to
the Hilton Offer (as it currently exists) the ITT Shareholders believe
that the Comprehensive Plan is superior to the Hilton Offer for a
number of distinct reasons.[3]
First, the ITT Shareholders believe that the Equity
Repurchase portion of the Comprehensive Plan will provide stockholders
who wish to sell a portion of their shares with an opportunity to do
so at a premium to recent market prices and at a considerable premium
to the Hilton Offer. Shareholders who wish to do so may sell their ITT
stock at a price of $70 per share which is a premium to both the
current market price and the Hilton Offer. The Equity Repurchase will
provide stockholders who wish to increase their proportionate
investment in ITT's
- --------
its post-secondary technical education business ("ITT Educational"),
to stockholders of the Company. (In amendment 20 to ITT's Form 14D-9,
these transactions are referred to as the "Distributions"). After the
Distributions, the Company's only business will be its telephone
directories publishing business and it is expected that the Company
will change its name to "ITT Information Services, Inc. ("ITT ISI").
[3] The ITT Shareholders' position in this memorandum is based upon
the facts as they exist on July 30, 1997 and is without prejudice to
their right to amend their position should circumstances change.
<PAGE>
three businesses with an opportunity to do so without incurring taxes
by not participating in the Equity Repurchase. Moreover, it will
afford stockholders an opportunity to dispose of shares without the
usual transaction costs associated with a market sale.
Second, the ITT Shareholders favor the Spinoff portion of
the Comprehensive Plan because it will separate businesses with
distinct characteristics so that each business can adopt and implement
appropriately tailored and specific plans. The Spinoff will result in
increased strategic focus for each of ITT's three distinct businesses
and a flattening of organizational structures.
The ITT Shareholders believe that the Spinoff and the
successful implementation by the three new entities created by the
Spinoff of their respective long-term strategic plans, will produce
greater value than Hilton's proposed transaction. Moreover, the
Spinoff will offer substantial tax advantages that Hilton could not
duplicate.[4]
- --------
[4] In connection with the Comprehensive Plan, ITT's Board also
approved certain governance provisions (the "Governance Provisions")
for Destinations after the Spinoff, including a provision in
Destinations' Articles of Incorporation for a classified board of
directors. Although the ITT Shareholder Plaintiffs do not necessarily
endorse this provision, as a whole the Comprehensive Plan better
serves the interests of ITT shareholders when compared to the Hilton
Offer.
<PAGE>
CONCLUSION
For the reasons set forth above, given the current Offer by
Hilton, the ITT Shareholders submit that the Comprehensive Plan
adopted by ITT's Board is superior to the Hilton Offer. Dated: July
31, 1997
ALBRIGHT, STODDARD, WARNICK &
ALBRIGHT
By: /s/ G. Mark Albright
------------------------
G. Mark Albright
Nevada Bar No. 001477
Quail Park Suite D-4
801 South Rancho Drive
Las Vegas, NV 89106
(702) 384-7111
Arthur N. Abbey
Mark C. Gardy
Stephen J. Fearon, Jr.
ABBEY, GARDY & SQUITIERI, LLP
212 East 39th Street
New York, New York 10016
(212) 889-3700
Robert A. Wallner
MILBERG WEISS BERSHAD HYNES &
LERACH LLP
One Pennsylvania Plaza
New York, New York 10119
(212) 594-5300
Jeffrey G. Smith
WOLF HALDENSTEIN ADLER FREEMAN &
HERZ LLP
270 Madison Avenue
New York, New York 10016
(212) 545-4600
Stephen Oestreich
WOLF POPPER, LLP
845 Third Avenue
New York, New York 10022
(212) 759-4600
Counsel for ITT Shareholder Plaintiffs
<PAGE>
[Exhibit 78]
SCHRECK MORRIS
STEVE MORRIS
KRISTINA PICKERING
1200 Bank of America Plaza
300 South Fourth Street
Las Vegas, Nevada 89101
(702) 474-9400
WACHTELL, LIPTON, ROSEN & KATZ
BERNARD W. NUSSBAUM
KENNETH B. FORREST
ERIC M. ROTH
MARC WOLINSKY
51 West 52nd Street
New York, New York 10019
(212) 403-1000
Attorneys for Defendants
HILTON HOTELS CORPORATION and HLT CORPORATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA
ITT CORPORATION, BETTE B. )
ANDERSON, RAND V. ARASKOG, )
NOLAN D. ARCHIBALD, ROBERT A. )
BOWMAN, ROBERT A. BURNETT, ) Case No.
PAUL G. KIRK, JR., EDWARD C. )
MEYER, BENJAMIN F. PAYTON, ) CV-S-97-00893-DWH (RLH)
VIN WEBER, MARGITA E. WHITE, )
AND KENDRICK R. WILSON, III, ) DEFENDANTS' MEMORANDUM OF
) POINTS AND AUTHORITIES IN
Plaintiffs, ) RESPONSE TO PLAINTIFFS'
) MOTION PURSUANT TO FED.
) R. CIV. P. RULE 57 FOR A
vs. ) SPEEDY HEARING
)
HILTON HOTELS CORPORATION )
and HLT CORPORATION, )
)
Defendants. )
)
)
- ------------------------------
MEMORANDUM OF POINTS AND AUTHORITIES
ITT Corporation and the members of its board of
directors have filed a motion asking this Court to hold
a speedy hearing on their claim seeking a declaration
<PAGE>
of the legality of their plan to break up ITT. Hilton contends that
the break-up plan violates applicable law and will shortly file
counterclaims seeking, among other things, declaratory and injunctive
relief against the plan. Hilton intends to prosecute its claims on a
timetable that will permit the Court to adjudicate the issues prior to
consummation of ITT's proposed break-up; however, at this time it is
premature to determine the appropriate schedule for a hearing. This is
because the ITT break-up plan is subject to a number of conditions,
including regulatory approval, that render its timing uncertain.
Hilton will be proceeding with discovery on the issue raised
by ITT's action and Hilton's counter- claims. Hilton has today served
a document request and interrogatories returnable within twenty days
and intends to serve deposition notices. As the
/ / /
/ / /
/ / /
/ / /
/ / /
/ / /
/ / /
/ / /
/ / /
/ / /
<PAGE>
timing for the proposed spin-off becomes more clear, counsel for
Hilton will confer with counsel for ITT and the Court to determine an
appropriate hearing schedule.
SCHRECK MORRIS
By: /s/ Steve Morris
-----------------
STEVE MORRIS
KRISTINA PICKERING
1200 Bank of America Plaza
300 South Fourth Street
Las Vegas, Nevada 89101
(702) 474-9400
WACHTELL, LIPTON, ROSEN & KATZ
BERNARD W. NUSSBAUM
KENNETH B. FORREST
ERIC M. ROTH
MARC WOLINSKY
51 West 52nd Street
New York, New York 10019
(212) 403-1000
Attorneys for Defendants
HILTON HOTELS CORPORATION
and HLT CORPORATION
<PAGE>
[Letterhead of]
CRAVATH, SWAINE & MOORE
[New York Office]
(212) 474-1466
August 1, 1997
ITT Corporation Schedule 14D-9
(Amendment No. 23)
On behalf of ITT Corporation, a Nevada corporation ("ITT"),
I enclose for filing with the Securities and Exchange Commission
Amendment No. 23 to the Solicitation/Recommendation Statement on
Schedule 14D-9 relating to a recommendation by the Board of Directors
of ITT with respect to an offer by Hilton Hotels Corporation
("Hilton") and HLT Corporation ("HLT"), to purchase for cash
61,145,475 shares of common stock, no par value, of ITT (including the
associated Rights). Please be advised that (i) one complete, manually
signed copy of Amendment No. 23 is being delivered by hand to
Wachtell, Lipton, Rosen & Katz, as agent for Hilton and HLT. If you
have any questions regarding the enclosed Amendment No. 23, please
telephone the undersigned at (212) 474-1466.
Sincerely,
/s/ Peter S. Malloy
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Peter S. Malloy
Securities and Exchange Commission
450 Fifth street, N.W.
Washington, DC 20549
Attention of Filing Desk
Encls.
