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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
(Amendment No. 46)
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 Exhibits 121 and 122 hereto, respectively, and are
incorporated herein by reference.
Item 9. Exhibits.
The response to Item 9 is hereby amended by adding the following
new Exhibits:
121. Letter to stockholders of the Company dated October 31, 1997.
122. Text of advertisement published by the Company on November 2,
1997 and November 3, 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 November 3, 1997
<PAGE>
EXHIBIT INDEX
Exhibit Description Page No.
(121) Letter to stockholders of the Company dated
October 31, 1997.......................................
(122) Text of advertisement published by the Company on
November 2, 1997 and November 3, 1997..................
[Exhibit 121]
[Letterhead of ITT Corporation]
October 31, 1997
Dear Fellow Stockholder:
By now you should have received a proxy statement supplement from
ITT with information on your Board's unanimous decision to enter into a
definitive merger agreement with Starwood Lodging, the country's largest
and best-performing hotel real estate investment trust (REIT).
The Starwood Transaction Is Compelling -- Both Strategically and
Financially
Starwood will acquire ITT for $82 per ITT share in cash and
Starwood stock (subject to certain collar provisions), a substantial
premium of $12 per share, or 17%, to Hilton's inadequate hostile offer.
Combining Starwood and ITT will create the world's largest hotel and gaming
company, with 650 hotels in 70 countries, annual revenues of over $10
billion, and strong growth prospects. The merger will join Starwood's
premier Westin hotel brand with ITT's Sheraton, Ciga, Luxury Collection and
Four Points hotels as well as with our Caesars casinos. We believe the
capital base and human resources at the combined companies should create
significant growth prospects on a global basis.
ITT's Board is working diligently on your behalf to obtain the
best value for your shares. Hilton is continuing its proxy fight and is
still trying to replace your Board with its own handpicked nominees who
would rubber stamp Hilton's lowball $70 per share stock-and-cash offer. We
urge you to support ITT's Board, which expects to complete the Starwood
transaction by late January or early February, by signing and returning the
BLUE proxy card. Ignore Hilton's white proxy card. If you have already
returned Hilton's white card, signing and returning the BLUE card today
will automatically cancel any earlier vote for the Hilton nominees.
The Starwood Lodging Transaction Provides Both Immediate And Long-Term
Value
Through the Starwood transaction, ITT shareholders will receive
$82 in value -- $15 in cash and $67 worth of new Starwood stock. This
transaction is far superior to Hilton's unsolicited $70 cash-and-stock
offer. Starwood also has a "paired share" REIT structure that we believe
should facilitate growth at a rate surpassing what a combination with
Hilton could achieve. We believe that Hilton, in its attempt to replace
ITT's Board of Directors and effect its inadequate offer, may try to attack
this legal structure in Congress, in Washington, D.C. and in the media with
the exclusive purpose of damaging Starwood's stock price and reducing the
value to be received by ITT shareholders.
When merged with Westin Hotels, which Starwood is also buying,
the new company will be the preeminent hotel and gaming company. Unlike a
Hilton/ITT combination, where Hilton hotels could compete with Sheraton
hotels, Starwood, Westin and ITT properties are highly complementary.
Starwood Shares Have Performed Superbly -- and Pay Substantial Cash
Dividends
Starwood has moved aggressively to build what is expected to
become the world's largest hotel and gaming company. As a result of skilled
and focused management, Starwood has seen its stock price increase more
than fivefold since early 1995 when Barry Sternlicht and his team assumed
control. During this time, Starwood has significantly outperformed all
market indices, other REITs and Hilton. In addition, Starwood pays a
substantial cash dividend (currently $1.92 per share a year). Upon becoming
Starwood shareholders, ITT shareholders will be entitled to Starwood
dividends. It is your Board's belief that ITT shareholders will continue to
benefit from Starwood's keen focus on shareholder value and its superior
structure and operations.
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2
Starwood And ITT Are An Excellent Strategic Fit
Joining with Starwood Lodging represents an outstanding growth
opportunity and fit for ITT. The combination will create the leader in
hotel and gaming brands, geographic reach and operational excellence. It
will serve all segments of the upscale global hotel market through The
Luxury Collection, Westin and Sheraton and the mid-price segment through
Four Points. It will own, manage or franchise 430 hotels in North America,
81 in Europe, 68 in Asia, 35 in Latin America and 36 in the Middle East and
Africa. It will have hotels in virtually every major city in the world, and
also own and/or manage many resorts and casinos. In addition, many of the
over 100 existing Starwood hotels are expected to become either Sheraton-
or Westin-managed properties, substantially accelerating the expansion of
these premium brands.
On the marketing side, we believe there are many significant
advantages to the combination. The combined hotel preference programs
(Westin Premier and Sheraton Club International) will have over three
million members. We believed a shared reservation system will allow us to
fill hotels in a highly efficient manner, and the companies expect to
implement a powerful combined global marketing effort that can increase
brand awareness and help attract new customers.
Starwood is also firmly committed to getting the most out of
Caesars casinos and believes ITT's gaming properties and management,
combined with Starwood's resources and "paired share" structure, can
continue producing outstanding results for shareholders.
Starwood has requested that ITT continue to explore ways to
realize the full value of its non-core assets, including ITT World
Directories, our strong overseas telephone directories business, and ITT
Educational Services, our leading post-secondary technical school business.
Starwood has said it will dispose of non-core assets only in ways that
maximize shareholder value. Accordingly, ITT is continuing to explore the
best way to attain maximum value for these assets.
Vote For The ITT Directors: Get $82 Per Share And Strong Growth Potential
After careful deliberation and a lot of hard and thoughtful work,
your Board is convinced that the Starwood transaction creates an
advantageous growth structure for ITT's assets and superb value for ITT's
shareholders. It is clearly superior to Hilton's offer, which Mr.
Bollenbach has repeatedly suggested he won't raise. At $82 per share, it is
worth almost $1.5 billion more to ITT shareholders than Hilton's $70 offer
- -- and $3.3 billion, or $27 per share, more than Hilton's earlier $55
offer. Of course, your Board would consider any unsolicited alternative
proposals it might receive.
We are excited about the opportunities the Starwood transaction
will create for ITT's shareholders, employees, customers and communities.
But don't just take our word for it. Here are some comments from
independent third parties about this dynamic combination.
"The market loves the deal that's been presented by Starwood
Lodging." Stephen Bollenbach, Chief Executive Officer,
Hilton Hotels (The New York Times, 10/22/97)*
"Without question, this deal has enhanced shareholder
value." Bruce Turner, Salomon Brothers (USA Today,
10/21/97)*
"It [Starwood's offer] makes the Hilton bid grossly
inadequate, not only on today's prices but what the combined
Starwood-ITT Company could mean to shareholders going
forward." James Murren, Deutsche Morgan Grenfell
(Knight-Ridder, 10/21/97)*
"Starwood has done a phenomenal job creating shareholder
value." Steven Hash, Lehman Brothers (The Washington Post,
10/21/97)*
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3
"Starwood trades at the multiple it does in large part
because the company has proven not only that it's a very
savvy buyer, but also that it knows how to operate its
properties." Jim Sullivan, Prudential Securities (Barron's,
10/25/97)*
"This will make Starwood a juggernaut . . . They have a very
powerful roster of brands." Marvin Roffman, Roffman-Miller
Associates (Knight-Ridder, 10/21/97)*
As noted in our recent proxy mailing, we expect the Starwood
transaction to be completed in late January or early February. To
proceed with this compelling combination, and to continue to have the
benefit of a Board dedicated to achieving the highest possible value,
you must reelect the ITT Board at the November 12 annual meeting.
To support the Starwood transaction, which will give you $82
per ITT share in cash and Starwood stock, you must sign, date and
return the BLUE card. If you need help voting your shares, please call
our proxy firm, Georgeson & Company Inc., toll-free at (800) 223-2064.
Thank you.
Sincerely yours,
/s/ RAND V. ARASKOG
Rand V. Araskog
Chairman and Chief Executive
- ------------------
* Permission to include this quotation has not been sought or obtained.
<PAGE>
4
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
[Exhibit 122]
Attention ITT Shareholders:
VOTE NOW FOR ITT'S DIRECTORS:
Get $82 Per Share And Strong Growth Potential
ITT recently signed a merger agreement with Starwood Lodging, the
largest and best-performing hotel real estate investment trust (REIT).
ITT believes the Starwood transaction is compelling, both
strategically and financially.
Starwood will acquire ITT for $82 per ITT share in cash and Starwood
stock. This is a premium of $12 per share--or 17%--to Hilton's inadequate
hostile offer.
o Combining Starwood and ITT will create the world's largest
hotel and gaming company. It will have over 650 hotels and
14 casinos in 70 countries, annual revenues of over $10
billion, a strong balance sheet and exceptional global
growth prospects.
o ITT and Starwood are an excellent strategic fit. Starwood's
premier Westin hotels will be combined with ITT's Sheraton,
Ciga, Luxury Collection and Four Points hotels as well as
with ITT's Caesars casinos. Together, we will serve all
segments of the upscale global hotel market and have a major
presence in resorts and gaming.
o For each ITT share, you will receive $82 in value--$15 in
cash and $67 in new Starwood stock. You get the potential
upside of owning shares in a dynamic growth company with the
benefit of owning real estate through a REIT structure.
o Starwood shares have increased more than fivefold since
Barry Sternlicht and his team assumed control in 1995.
Starwood stock has significantly outperformed all market
indices--and Hilton. As one Wall Street analyst puts it,
"Starwood has done a phenomenal job creating shareholder
value." (Lehman Brothers)*
o Because Starwood is a REIT, it pays a substantial cash
dividend (currently $1.92 per share per year). Upon becoming
Starwood shareholders, ITT shareholders will be entitled to
Starwood dividends.
The ITT Board is convinced that the Starwood transaction creates an
advantageous growth structure for ITT assets and superb value for ITT
shareholders. The Starwood transaction is clearly superior to Hilton's
hostile offer, which Hilton has repeatedly suggested it won't raise.
At $82 a share, it is worth almost $1.5 billion more than Hilton's $70
offer and $3.3 billion more than its earlier $55 offer. But to assure
that the ITT-Starwood transaction can become a reality early next
year, we need your vote on November 12 to reelect ITT's directors.
If You Want The Starwood Transaction
Reelect The ITT Directors On the BLUE Card
You must use the BLUE proxy card to reelect ITT's Directors and
receive the benefits of the Starwood transaction. Please sign and
return the BLUE card today. Ignore Hilton's white card. For help
voting your shares, please call our proxy firm, GEORGESON & COMPANY
INC. toll free at (800) 223-2064.
ITT
* Permission to include this quotation has not been sought or obtained.
