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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): August 29, 1996
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Hilton Hotels Corporation
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(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) Number) 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.
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(a) On August 29, 1996, Hilton Hotels Corporation ("HHC"), the owner
of the Hilton name within the United States, and Ladbroke Group PLC
("Ladbroke"), whose wholly owned subsidiary Hilton International ("HIC") holds
the rights to the Hilton name outside of the United States, announced the
signing of a heads of agreement for a substantive alliance that includes the
reunification of the Hilton hotel brand. The alliance is subject to the signing
of definitive agreements and the receipt of certain regulatory and other
approvals. Under the terms of the alliance, HHC and HIC intend from 1997 to
cooperate on sales and marketing, loyalty programs, hotel development and other
operational matters. The definitive agreements will contain a reciprocal
opportunity for the purchase of shares in the other party, subject to the rules
applying to such purchases where there are cross directorships. The agreement
will be reinforced, subject to necessary approvals, by HHC President and Chief
Executive Officer Stephen F. Bollenbach joining the Board of Directors of
Ladbroke and Ladbroke's Chief Executive Officer Peter George joining the Board
of Directors of HHC. The key elements of the heads of agreement include the
formation of a jointly-owned company to market and develop the Hilton brand
domestically and internationally, the proposed extension of HHC's HHonors
frequent guest loyalty program to all Hilton hotels, the ability of HHC and
Ladbroke to participate in each other's future hotel developments, and the
opportunity for Ladbroke to participate as a partner in some of HHC's key gaming
developments in the United States. A copy of the press release dated August 29,
1996 relating to the alliance is attached as Exhibit 99.1 hereto and
incorporated herein by reference.
(b) Hilton, through its wholly-owned limited partnership Flamingo
Hilton Riverboat Casino, L.P., has been developing a riverboat casino in Kansas
City, Missouri. The opening of the riverboat casino is subject to the receipt of
all required gaming licenses and permits. As of the date hereof, the Missouri
Gaming Commission (the "MGC") has not granted such gaming licenses. It is
anticipated that the MGC will grant such gaming licenses in September or October
of 1996, however there can be no assurance that this will be the case.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
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7(c) Exhibits.
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99.1 Press Release of Hilton Hotels Corporation dated August 29,
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/ Robert La Forgia
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Name: Robert La Forgia
Dated: August 29, 1996 Title: Senior Vice President and Controller
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EXHIBIT 99.1
[LETTERHEAD OF LADBROKE GROUP PLC]
[LETTERHEAD OF HILTON HOTELS CORPORATION]
PRESS RELEASE
LADBROKE GROUP AND HILTON HOTELS CORPORATION
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ANNOUNCE WORLDWIDE ALLIANCE
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Hilton hotel brand to be reunited after 32 years
London, 29th August 1996 -- Hilton Hotels Corporation (NYSE:HLT) ("HHC"), the
owner of the Hilton name within the US, and Ladbroke Group PLC ("Ladbroke"),
whose wholly owned subsidiary Hilton International ("HIC") holds the rights
elsewhere in the world, announced today the signing of heads of agreement for a
substantive worldwide alliance that includes the reunification of the Hilton
hotel brand. The alliance is subject to the signing of definitive agreements and
the receipt of certain regulatory and other approvals.
Under the terms of the alliance, HHC and HIC intend from 1997 to cooperate on
sales and marketing, loyalty programmes, hotel development and other operational
matters to the mutual benefit of each company, their hotel owners and their
shareholders.
The alliance provides HHC an immediate and significantly larger presence in the
international hotel arena, while giving Ladbroke a major position in the hotel
business in the US. The agreement will also provide Ladbroke with an opportunity
to participate in the expansion of HHC's growing gaming business in the US and
envisages future cooperation between the companies in major gaming developments
around the world.
The definitive agreements will contain a reciprocal opportunity for the purchase
in the other party, subject to the rules applying to such purchases where there
are cross directorships. HHC's current intention is to acquire a 5% stake in
Ladbroke at the earliest opportunity after the signing of the agreements.
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In addition, the agreement will be reinforced, subject to necessary approvals,
by HHC President and Chief Executive Officer Stephen F. Bollenbach joining the
Board of Directors of Ladbroke and Ladbroke's Chief Executive Officer Peter
George joining the HHC board.
Hilton, which is the most recognised brand name in the world's hotel industry,
has operated separately within and outside the US since 1964, when HIC was spun
off from HHC. Ladbroke acquired HIC in 1987. With 400 hotels in 49 countries,
the reunification of the brand will further enhance Hilton's leadership position
in one of the world's fastest growing industries.
The key elements of the heads of agreement comprise:
* the formation of a jointly owned company to market and develop the Hilton
brand in a cooperative manner around the world. This would include
coordinated and jointly developed advertising, promotions, product
development and reservations systems. It would also review the potential
benefits of adopting a unified Hilton brand mark. The company will utilise
management from within the existing businesses of the two organisations.
* the proposed extension of HHC's highly successful HHonors frequent guest
loyalty programme to all Hilton hotels. HHonors currently has nearly five
million active members and is the brand leader in loyalty programmes within
the hotel industry.
* the ability to participate in each other's future hotel developments. This
will include in particular:
* a 20% profit participation in each other's full-service hotel development
in exchange for a 20% contribution to any required capital investment.
* an agreement whereby, with the consent of both Conrad and HIC owners in
the relevant locations, HIC will be responsible for the future development
of the Conrad brand outside the US.
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* HIC will license HHC to expand HHC's franchising business into
Mexico and Canada for which HIC will receive 20% of the profits.
In return, HIC will participate in HHC's full-service franchising
business, enjoying 20% of the profits of future developments.
* a profit participation arrangement as the parties explore and
develop a mid-market brand in local markets around the world.
* the opportunity for Ladbroke to participate as a partner in some of
HHC's key gaming developments in the US. When its acquisition of Bally
Entertainment Corporation is completed, HHC will be the world's largest
casino gaming organisation. In addition, the parties will cooperate on
ways of jointly pursuing major gaming developments worldwide.
An Alliance Liaison Group, consisting of the chief executive and two other
senior executives from each company, will be responsible for implementing the
alliance to maximise opportunities for both Ladbroke and HHC. Joint working
parties are being formed to carry out the proposals, under the guidance of the
Alliance Liaison Group.
It is the intention of both parties that the agreements should be signed as soon
as possible so that the alliance can become effective in early 1997. In
particular, it is anticipated that certain sales and marketing initiatives,
particularly the extension of the HHonors frequent guest loyalty programme, will
be operational from 1st January 1997. The agreements will have an initial term
of 10 years, automatically renewable for further periods of 10 years thereafter.
Mr. Peter George commented:
"Since I became Chief Executive, it's been my ambition to reunite the Hilton
brand and I am delighted to be making today's announcement with Steve
Bollenbach. This deal makes good sense for our customers, our employees and our
shareholders. Through this alliance, our two companies intend to lead the hotel
and gaming markets worldwide."
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Mr. Bollenbach commented:
"One of our stated growth objectives has been to leverage the powerful Hilton
brand name by expanding our international presence and this agreement with
Ladbroke is a significant step toward achieving that goal. Not only does this
alliance give HHC a major and immediate presence in the global lodging industry,
but the financial commitments made by our two companies confirm Peter's and my
dedication to the success of this effort."
-ends-
Enquiries to:
Stephen Devany Marc Grossman
Head of Corporate Affairs Senior Vice President-
Ladbroke Group PLC Corporate Affairs
Hilton Hotels Corporation
Both available today at Ladbroke Group PLC on: (44) 171 323 5000
Thereafter, Marc Grossman will be available on: (1) 310 205 4030
