SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9
(Amendment No. 43)
SOLICITATION/RECOMMENDATION STATEMENT
Pursuant to Section 14(d)(4)
of the Securities Exchange Act of 1934
ITT CORPORATION
(Name of Subject Company)
ITT CORPORATION
(Name of Person(s) Filing Statement)
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
<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 4. The Solicitation or Recommendation.
The response to Item 4 is hereby amended by adding the
following after the final paragraph of Item 4:
Reference is made to the Company's soliciting materials which
are filed as Exhibit 118 hereto and are incorporated herein by
reference.
Item 9. Exhibits.
The response to Item 9 is hereby amended by adding the
following new Exhibit:
118. Letter to stockholders of the Company dated
October 22, 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
---------------------------------
Name: Richard S. Ward
Title: Executive Vice President,
General Counsel and
Corporate Secretary
Dated as of October 23, 1997
<PAGE>
EXHIBIT INDEX
Exhibit Description Page No.
(118) Letter to stockholders of the Company dated
October 22, 1997.......................
[Exhibit 118]
[Letterhead of ITT Corporation]
October 22, 1997
Dear Fellow Stockholders:
On Monday, your company and Starwood Lodging announced the
signing of a definitive merger agreement providing for Starwood
Lodging to acquire ITT for $82 per ITT share. Under the agreement, ITT
stockholders will receive $15 in cash and $67 in newly issued shares
in Starwood Lodging, subject to certain collar provisions. This
transaction is expected to close in the first quarter of 1998.
Your Board of Directors has unanimously approved this
exciting merger which will create the world's largest and most
powerful hotel and gaming company, with 650 hotels in 70 countries.
The merger will combine Starwood's premier Westin brand with our
Sheraton, Ciga, Luxury Collection and Four Points hotels. The Starwood
transaction is the right structure for our assets, the right
transaction for our stockholders, and the right opportunity for our
employees. To date, in 1997 Starwood Lodging has declared dividends of
$1.26 per share and as a result of this merger you can expect to see
your dividend in 1998. The complete text of the press release
describing the merger is enclosed with this letter.
Your Board of Directors has worked diligently to negotiate a
transaction which the Board believes creates vastly superior value to
Hilton's low ball offer of $70 per ITT share in cash and Hilton stock.
Your Board will continue to put the interests of stockholders first.
We believe the best way to obtain the highest value from
your investment is to reelect the ITT Board of Directors who are
committed to your best interests. Reject Hilton's hand picked nominees
who support Hilton's inadequate $70 per share offer for your shares
and who are not expected actively to solicit additional offers! Return
ITT's blue proxy card; do not return Hilton's white card.
WE URGE YOU TO REELECT ITT'S BOARD OF DIRECTORS WHO ARE
COMMITTED TO MAXIMIZING THE VALUE OF YOUR INVESTMENT. VOTE THE BLUE
PROXY CARD TODAY!
Sincerely,
/s/ Rand V. Araskog
Rand V. Araskog
Chairman and Chief Executive
<PAGE>
FOR IMMEDIATE RELEASE
Contacts:
Starwood Lodging ITT Corporation
Media: Media:
Michael Claes 212-614-5236 Jim Gallagher 212-258-1261
or 212-258-1281 George Sard/David Reno 212-687-8080
Analysts: Analysts:
Stuart Carlisle 212-614-5287 Anne Tarbell 212-258-1622
STARWOOD LODGING TO ACQUIRE ITT FOR $82 PER SHARE
$13.3 BILLION TRANSACTION WILL CREATE
WORLD'S LARGEST HOTEL COMPANY
Starwood Lodging Expects 20% Accretion To Pro Forma FFO
Phoenix, AZ and New York, October 20, 1997 -- Starwood
Lodging (NYSE: HOT) and ITT Corporation (NYSE: ITT) announced today
that they have signed a definitive merger agreement providing for
Starwood Lodging to acquire ITT for $15.00 in cash and $67.00 in newly
issued paired shares in Starwood Lodging for a total value to ITT
shareholders of $82.00 per share.
The combination of Starwood Lodging and ITT will create the
preeminent global hotel company, with some 650 hotels in 70 countries,
with combined revenues over $10 billion. It will control six powerful
international brands: Sheraton, Westin, CIGA, Four Points, The Luxury
Collection and Caesars. Including its pending acquisition of Westin
Hotels, Starwood Lodging will become the largest hotel company and the
largest real estate investment trust in the world, with a total market
capitalization of approximately $20 billion. Starwood Lodging's
strategy will focus on expanding its global hotel and gaming
businesses and continuing to evaluate the divestiture of non-core
assets.
Starwood Lodging will also assume $3.5 billion in
outstanding ITT debt, for a total transaction value of approximately
$13.3 billion.
The transaction will be accounted for as a purchase, and is
expected to be approximately 20 percent accretive to Starwood
Lodging's pro forma Funds From Operations (FFO) during the first 12
months of combined operations. Contributing to this accretion will be
an estimated $100 million in synergies from greater workforce
economics including those recently announced by ITT; shared
technology, reservation, and purchasing services; cross-marketing
activities; a combined hotel preference program (Westin Premier and
Sheraton Club International) and other efficiencies arising from the
merger.
The taxable transaction is anticipated to close in the
first quarter of 1998, subject to shareholder, gaming, and
antitrust approvals. Under the merger agreement,
<PAGE>
Starwood Lodging may receive a termination fee and reimbursement of
expenses under certain circumstances.
Shares of Starwood Lodging Trust, which is the nation's
largest hotel real estate investment trust, are paired with and trade
together with shares of Starwood Lodging Corporation, a premier hotel
operating company.
Barry S. Sternlicht, who will continue as Chairman and CEO
of the combined companies, said, "The lodging industry has become a
global business that benefits from scale and product distribution.
This transaction gives the combined companies a sound balance sheet,
which will enable us to continue to be a growth company and to take
advantage of our current acquisition pipeline and a rapidly
consolidating industry."
"This acquisition complements our current holdings in every
part of the world by strengthening our presence in key markets,
including Europe, Latin America and Africa. The combination of
Starwood, Westin and Sheraton will create the number one upscale hotel
company in the world, and will dramatically strengthen our overall
growth platform. We will have the financial clout, operating
infrastructure, proprietary pipeline and management capabilities to
pursue acquisitions globally," he said.
"Rand Araskog has spent 31 years at ITT and 18 years as
Chairman and CEO. He has built one of the greatest collections of
brands, assets and people. We intend to retain a significant number of
ITT senior executives, and look forward to working with them in the
transition to build off the world-class platform they have created,"
said Sternlicht.
Mr. Araskog said, "This is a superb transaction for ITT
shareholders, combining the benefits of Starwood's paired share REIT
structure, the extraordinary fit between Sheraton and Westin, Starwood
Lodging's substantial quarterly cash dividends, and enormous growth
potential under Starwood's leadership. This is the right structure for
our assets, the right transaction for our shareholders, and the right
opportunity for our employees. ITT's directors have worked diligently
to see to it that our stockholders get the best possible deal."
"We look forward to working closely with Barry Sternlicht
and the proven Starwood management team, which has created more
shareholder value over the past three years than any other REIT, to
ensure the future success and growth of this new enterprise," he
added.
ITT will have minority representation on the Starwood
Lodging boards. ITT will designate four directors, one of whom will be
Mr. Araskog.
The offer includes a collar of $4.00 per share around
$57.263, the five-day trailing average price of Starwood Lodging
stock. The exchange ratio will be fixed at 1.094 Starwood Lodging
shares per ITT share if Starwood Lodging's share price exceeds $61.263
per share, and 1.258 Starwood Lodging shares per ITT share if Starwood
Lodging's shares trade below $53.263, based on Starwood Lodging's
average share price during a 20-day period prior to the date of the
ITT stockholders meeting.
Starwood Lodging has received "highly confident" letters from BT Alex.
Brown Incorporated and Bear Stearns & Co., Inc. to finance the transaction.
<PAGE>
ITT Corporation consists of Sheraton, a premier hotel
company which owns, manages and franchises 424 hotels in 62 countries;
Caesars, the leading brand name in the gaming industry; and ITT World
Directories. ITT also has ownership positions in ITT Educational
Services (83.3%) and Madison Square Garden (10.2%). ITT has a
definitive agreement to sell its 50% interest in New York City
television station WBIS+ to Paxson Communications Corp. (ASE: PXN).
Starwood Lodging Trust is the largest hotel REIT in the
United States, which, including the pending acquisition of Westin
Hotels, owns or manages 162 hotels with over 60,000 rooms in 24
countries. Starwood Lodging Trust conducts all of its business as
general partner of SLT Realty Limited Partnership. Starwood Lodging
Corporation, which conducts substantially all of its business as
managing general partner of SLC Operating Limited Partnership, leases
properties from the Trust and operates them directly or through
third-party management companies.
# # #
Statements in this press release that are not strictly
historical are "forward-looking" statements under the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Although Starwood Lodging believes the expectations reflected in such
forward-looking statements are based on reasonable assumptions, it can
give no assurance that its expectations will be attained.
Forward-looking statements involve known and unknown risks which may
cause Starwood Lodging's actual results to differ materially from
expected results. Factors that could cause results to differ
materially from Starwood Lodging's expectations include, without
limitation, completion of the acquisition described in this press
release and future acquisitions, the availability of capital for
acquisitions and for renovations, the ability to maintain existing
franchise, management and representation agreements and to obtain new
ones on current terms. Competition within the lodging industry, the
cyclicality of the real estate business and the hotel business, real
estate and economic conditions and other risks detailed from time to
time in Starwood Lodging's SEC reports including quarterly reports on
form 10Q, reports on 8K and annual reports on form 10K.
<PAGE>
ATTENTION ITT SHAREHOLDERS:
DO YOU WANT DIRECTORS WHO WILL
RUBBER STAMP HILTON'S LOWBALL
BID FOR ITT--OR, EVEN WORSE,
RUN YOUR COMPANY?
Hilton is asking you to replace ITT's Board of Directors with its own
handpicked nominees who would rubber stamp Hilton's inadequate $70 per
share hostile offer for your company. But do you really know who these
people are? Will they work for your best interests--or only do what's
best for Hilton? Hilton's own proxy statement admits that "it's not
expected that the Hilton nominees would actively solicit additional
offers" for ITT.
Before deciding whether to vote for Hilton's "rubber stamp" Board,
take a moment to look at who Hilton is proposing as the new directors
of your company.
Hilton's Nominees
According to Hilton's own proxy, their nominees include:
o Three people who served in senior executive capacities at
companies that have filed for bankruptcy since 1990.
o Four former directors of Bally Entertainment who were paid
$200,000 by Hilton after Hilton bought Bally last year.
o The brother-in-law of Hilton's Chief Financial Officer.
o An executive of DiGiorgio Corporation, the food distributor
owned by Hilton's head gaming officer.
o Two former colleagues of Hilton's Chief Executive Officer.
o Two former executives at Hilton's investment banking firm.
o A partner at one of Hilton's law firms.
o Eight people with no current job.
Would you be comfortable with these people as directors of
ITT--especially when nobody knows how long they will control the fate
of your company? Remember, it took Hilton 6 months to get gaming
approvals to complete its friendly acquisition of Bally last year.
If you vote for the ITT Board, you will get directors committed to
creating economic value superior to Hilton's inadequate hostile offer.
The ITT Board has already overseen the creation of more than $15
billion in market value since the beginning of 1992, and stockholders
in ITT over that time have seen their investment outperform the S&P
500 by more than 70%. What will Hilton's nominees do for you?
Choose Directors Who Are Committed To You
Vote For The ITT Directors On The BLUE Card
You must use the BLUE proxy card to reelect ITT's experienced
Directors. Please sign and return your BLUE card today. Ignore
Hilton's white card. If you have questions, or need information or
voting assistance, please call our proxy firm, GEORGESON & COMPANY
INC. toll-free at (800) 223-2064.
ITT
<PAGE>
If your ITT shares are held
in the name of a bank or brokerage firm,
only that firm can execute a proxy on your behalf.
Please contact the person responsible for your account
and give instructions for the BLUE PROXY CARD to be voted
with your Board's recommendation.
If you have any questions or need assistance in
voting your shares, please contact our proxy solicitor:
GEORGESON
& COMPANY INC.
Bank and Brokers Call Collect:
(212) 440-9800
or
ALL OTHERS CALL TOLL-FREE:
(800) 223-2064
INTERNET: World Wide Web http://www.georgeson.com
