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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): June 6, 1996
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Hilton Hotels Corporation
(Exact Name of Registrant as
Specified in Charter)
Delaware 1-3427 36-2058176
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(State or Other (Commission (IRS Employer
Jurisdiction of File Identification
Incorporation) No.)
9336 Civic Center Drive
Beverly Hills, California 90210
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(Address of Principal
Executive Offices)
(310) 278-4321
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(Registrant's telephone
number, including area code)
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ITEM 5. OTHER EVENTS.
On June 6, 1996, Hilton Hotels corporation ("Hilton"') announced that it
had entered into an Agreement and Plan of Merger (the "Merger Agreement")
dated as of June 6, 1996 with Bally Entertainment Corporation ("Bally"),
pursuant to which Bally will merge with and into Hilton (the "Merger"). If
the Merger is consummated, each share of the Common Stock, par value
$0.66-2/3 per share, of Bally (the "Bally Common Stock") issued and
outstanding immediately prior to the Merger would be converted into the right
to receive one share of the Common Stock, par value $2.50 per share, of
Hilton (the "Hilton Common Stock"), after giving effect to a contemplated 4
for 1 stock split of the Hilton Common Stock. In the event that the trading
price of the Hilton Common Stock (after giving effect to the contemplated
stock split) for a specified period of time prior to the effective time of
the Merger is less than $27.00 per share, each holder of Bally Common Stock
will receive an additional cash payment for each share of Bally Common Stock
held by such holder, up to a maximum of $3.00 per share, equal to the excess
of $27.00 over such trading price. In addition, upon consummation of the
Merger, each share of the Preferred Redeemable Increased Dividend Equity
Securities, 8% PRIDES, Convertible Preferred Stock of Bally issued and
outstanding immediately prior to the Merger will be converted into the right
to receive on share of newly authorized Preferred Redeemable Increased
Dividend Equity Securities, 8% PRIDES, Convertible Preferred Stock of Hilton.
A copy of the press release dated June 6, 1996 relating to the Merger
Agreement is attached as Exhibit 99.1 hereto and incorporated herein by
reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
7(c) EXHIBITS.
(99.1) Press Release of Hilton Hotels Corporation dated June 6,
1996.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HILTON HOTELS CORPORATION
By: /s/ Matthew J. Hart
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Name: Matthew J. Hart
Title: Executive Vice President and
Chief Financial Officer
Dated: June 13, 1996
2
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EXHIBIT 99.1
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HILTON HOTELS AND BALLY ENTERTAINMENT TO
MERGE IN STOCK DEAL; HILTON ANNOUNCES
FOUR-FOR-ONE STOCK SPLIT
BEVERLY HILLS, CALIF. JUNE 6, 1996 -- Hilton Hotels Corporation
(NYSE:HLT) and Bally Entertainment Corporation (NYSE:BLY) today announced the
signing of a merger agreement that makes Hilton, already the world's leading
name in lodging, into the world's largest casino gaming company. The
companies reached an agreement whereby Hilton will acquire Bally in a stock
for stock merger valued at approximately $2 billion.
The transaction, which has been approved by both Boards of
Directors, is subject to approval by the companies' shareholders and gaming
regulators of several states, and is expected to close by year-end 1996.
Terms of the agreement call for Hilton to complete a 4-for-1 stock
split prior to consummation of the transaction, with Bally shareholders
receiving one share of Hilton Stock (on a post-split basis) for every Bally
share. Based on the current price of $117.00 of Hilton common stock, Bally
shareholders would receive value of $29.25 per share, or an aggregate of
about $2 billion based on Bally's approximately 71.3 million fully diluted
shares. In addition, Hilton will assume or refinance Bally's $1 billion net
debt. If the value of the stock consideration is below $27 per share at the
time of closing, Hilton will make up the difference in cash, up to a maximum
of $3 per share.
Stephen F. Bollenbach, president and chief executive officer of
Hilton Hotels Corporation, and Arthur M. Goldberg, chairman and chief
executive officer of Bally Entertainment Corporation, cited the natural
synergies between the two companies as well as the benefits of creating the
world's largest gaming company in an industry where smaller companies are
finding it increasingly difficult to grow and compete.
On a pro forma combined basis, the companies' latest twelve months
of results would have shown earnings before interest, taxes, depreciation and
amortization (EBITDA) of $834 million. With $537 million from combined casino
gaming properties, Hilton's gaming operations would be nearly 25 percent
larger than the next largest gaming company. The combined organization will
include 15 casinos with nearly 800,000 square feet of gaming space; 18,000
hotel rooms in its gaming facilities; and more than 100,000 hotel room in
total. The companies also are currently developing several major new casino
properties.
"It has been our stated goal to be the winner in the consolidation
of the gaming industry and this transaction is the key step in achieving
that goal," Bollenbach said. "Bally's quality properties, strategic locations
and new projects are unparalleled in the industry, and its outstanding
financial performance fits perfectly with Hilton's image and industry
leadership position."
"The joining of our two companies forms a powerful organization
with unmatched financial strength and operating expertise. We gain an
important, immediate leadership position in Atlantic City through Bally's two
existing properties -- Bally's Park Place and The Grand. Our prominence in
Las Vegas, covering nearly a quarter mile at the center of the Golden Mile of
the Strip, running from the Flamingo Hilton-Las Vegas to Bally's Las Vegas
and the upcoming Paris Casino-Resort, is incredible, particularly when taking
into account Bally's monorail connecting with MGM Grand."
"Add to that the ability to leverage both the Hilton and Bally
names, Hilton's worldwide reservations system and global sales and marketing
programs, and our worldwide network of hotels and other casino gaming
properties, and you achieve unassailable market leadership," he said.
Bollenbach added that the stock-for-stock transaction is not
expected to adversely impact Hilton's investment grade status, and would
likely be accretive to Hilton earnings in 1996.
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Goldberg will join the combined company's board of Directors.
"I am very excited about the opportunity this merger provides all
of Bally's shareholders. It creates the world's number one hotel and gaming
company and I look forward to working closely with Steve Bollenbach to
ensure all of our shareholders continued growth."
Bollenbach added, "The most compelling reason for this merger is
creating the opportunity for greater growth of earnings and cash flows for
our shareholders. With an established presence in virtually all of the
world's major gaming jurisdictions, premiere projects already in the
pipeline, exceptional operating expertise, and cross-marketing and
promotional opportunities throughout both hotel and casino networks, it is
difficult to imagine a more powerful force in the gaming and lodging business."
Hilton Hotels Corporation currently owns or operates 10 casino
facilities in Las Vegas, Reno and Laughlin Nevada; New Orleans, Louisiana;
Windsor, Canada; the Gold Coast and Brisbane, Australia; and Istanbul,
Turkey. The company has casino projects under development in Kansas City,
Missouri and Punta del Este, Uruguay, scheduled to open in August 1996 and
January 1997, respectively. In addition, "Star Trek" The Experience,"
Hilton's collaboration with the Paramount Parks unit of Viacom, is slated for
a mid-1997 opening at the Las Vegas Hilton, along with a new 22,000
square-foot casino. Hilton also owns, operates, manages or franchises 240
hotels and resorts, including such world-renowned properties as the
Waldorf-Astoria, Hilton Hawaiian Village, Palmer House Hilton, New York
Hilton and Towers, Fontainebleau Hilton Resort and Towers and New Orleans
Hilton Riverside.
Conrad International Hotels operates five-star luxury hotels in
England, Hong Kong, Belgium, Ireland, Australia, Turkey, Spain and Egypt,
with properties in development in Singapore, Thailand, Indonesia, Uruguay and
other locations.
Bally Entertainment Corporation owns and operates three world-class
casino hotel resorts in Atlantic City and Las Vegas, a dockside casino and
hotel in Robinsonville, Mississippi (near Memphis, Tennessee) and a riverboat
casino in New Orleans, Louisiana. Additionally, Bally is developing the Paris
Casino-Resort, a spectacular new 3,000 room casino resort with 85,000 square
feet of casino space featuring a 50 story-recreation of the Eiffel Tower,
adjacent to Bally's Las Vegas on the Strip, with completion scheduled for
early 1998. In Atlantic City, Bally is constructing the Wild Wild West, a new
highly-themed 70,000 square-foot casino connected to Bally's Park Place,
scheduled for completion in mid-1997, and a new 300-room hotel tower at The
Grand, also scheduled to be completed in mid-1997.
(81-95)
CONTACT: Marc A. Grossman
Senior Vice President -- Corporate Affairs
Hilton Hotels Corporation
(212) 872-4600 OR
(310) 205-4012
Lee S. Hillman
Executive Vice President
Bally Entertainment Corporation
(312) 399-7615
