SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________
Schedule 14D-1
Tender Offer Statement
(Amendment No. 33)
Pursuant to
Section 14(d)(1) of the Securities Exchange Act of 1934
_______________________
ITT CORPORATION
(Name of Subject Company)
HILTON HOTELS CORPORATION
HLT CORPORATION
(Bidders)
COMMON STOCK, NO PAR VALUE
(Title of Class of Securities)
450912100
(CUSIP Number of Class of Securities)
MATTHEW J. HART
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
HILTON HOTELS CORPORATION
9336 CIVIC CENTER DRIVE
BEVERLY HILLS, CALIFORNIA 90210
(310) 278-4321
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications on Behalf of Bidders)
With a copy to:
STEVEN A. ROSENBLUM
WACHTELL, LIPTON, ROSEN & KATZ
51 WEST 52ND STREET
NEW YORK, NEW YORK 10019
TELEPHONE: (212) 403-1000<PAGE>
This Statement amends and supplements the Tender Of-
fer Statement on Schedule 14D-1 filed with the Securities and
Exchange Commission on January 31, 1997, as previously amended
(the "Schedule 14D-1"), relating to the offer by HLT Corpora-
tion, a Delaware corporation (the "Purchaser") and a wholly
owned subsidiary of Hilton Hotels Corporation, a Delaware cor-
poration ("Parent"), to purchase (i) 61,145,475 shares of Com-
mon Stock, no par value (the "Common Stock"), of ITT Corpora-
tion, a Nevada corporation (the "Company"), or such greater
number of shares of Common Stock which, when added to the num-
ber of shares of Common Stock owned by the Purchaser and its
affiliates, constitutes a majority of the total number of
shares of Common Stock outstanding on a fully diluted basis as
of the expiration of the Offer, and (ii) unless and until val-
idly redeemed by the Board of Directors of the Company, the
Series A Participating Cumulative Preferred Stock Purchase
Rights (the "Rights") associated therewith, upon the terms and
subject to the conditions set forth in the Offer to Purchase,
dated January 31, 1997 (the "Offer to Purchase"), and in the
related Letter of Transmittal, at a purchase price of $70 per
share (and associated Right), net to the tendering stockholder
in cash, without interest thereon. Capitalized terms used and
not defined herein shall have the meanings assigned such terms
in the Offer to Purchase and the Schedule 14D-1.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE
SUBJECT COMPANY.
On October 16, 1997, Stephen F. Bollenbach, President
and Chief Executive Officer of Parent, sent a letter to the
Board of Directors of the Company. The full text of Mr.
Bollenbach's letter is filed herewith as Exhibit (g)(30) and is
incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
On October 15, 1997, the FCC issued an order (the "FCC
Proxy Contest Order") approving the insubstantial transfer of
control of the Company that would result upon the election of
the nominees of Parent and the Purchaser to the Company Board
of Directors at the Company's November 12, 1997 annual meeting
of stockholders. The full text of the FCC Proxy Contest Order
is filed herewith as Exhibit (g)(31) and is incorporated herein
by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(g)(30) Text of Letter dated October 16, 1997 from Stephen
F. Bollenbach to the Board of Directors of the
Company.
(g)(31) FCC Proxy Contest Order.<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and be-
lief, I certify that the information set forth in this state-
ment is true, complete and correct.
Dated: October 16, 1997
HILTON HOTELS CORPORATION
By: /s/ Matthew J. Hart
Name: Matthew J. Hart
Title: Executive Vice President
and Chief Financial Officer
-2-<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and be-
lief, I certify that the information set forth in this state-
ment is true, complete and correct.
Dated: October 16, 1997
HLT CORPORATION
By: /s/ Arthur M. Goldberg
Name: Arthur M. Goldberg
Title: President
-3-<PAGE>
EXHIBIT INDEX
Exhibit Description
(g)(30) Text of Letter dated October 16, 1997 from Stephen
F. Bollenbach to the Board of Directors of the
Company.
(g)(31) FCC Proxy Contest Order.
Exhibit (g)(30)
[Letterhead of Hilton Hotels Corporation]
October 16, 1997
Board of Directors
ITT Corporation
1330 Avenue of the Americas
New York, New York 10019-5490
Dear Members of the Board:
Press reports, including this morning's article in USA Today,
indicate that ITT is once again seeking to take action that, in
the words of ITT's chairman, Rand Araskog, would "change the
landscape" between now and the November 12 annual meeting.
These press reports raise the concern that ITT management will
now propose a new transaction that, like the break-up plan, is
designed not to provide the greatest value to shareholders, but
rather to defeat the Hilton offer and deprive ITT shareholders
of a meaningful choice.
As I am sure you are aware, the clear purpose and intent of the
Nevada federal court's decision is to permit the ITT
shareholders to make an unimpeded choice as to whether they
wish to accept the Hilton offer by electing Hilton's nominees
to the ITT Board. Accordingly, any action taken by ITT prior
to the annual meeting that would interfere with the ability of
the ITT shareholders to choose to accept the Hilton offer by
electing the Hilton nominees would violate the court's order.
We expect that you, as the directors of ITT, will not again
permit ITT to take such action. In the event ITT does take
such action, however, Hilton will hold ITT, its Board of
Directors, and any third party that may be involved,
responsible for violating the court's direction to hold a fair
annual meeting and to give shareholders an unimpeded choice.
In addition to injunctive relief, Hilton would, if appropriate,
seek to recover monetary damages arising from any such action.
The combination of Hilton and ITT represents a tremendous
opportunity for both our companies, and will provide the
greatest value to the ITT shareholders. The interests of both
our companies would best be served by your meeting with us now
to reach a prompt completion of the Hilton-ITT combination. We
continue to view your failure to meet with us to constitute an
inexplicable violation of your fiduciary duties to your
shareholders.
Sincerely,
/s/ Stephen F. Bollenbach
Stephen F. Bollenbach
FEDERAL COMMUNICATIONS COMMISSION FCC 97-381
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Exhibit (g)(31)
BEFORE THE
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON, D.C. 20554
In re Application of )
)
HLT CORPORATION AND )
HILTON HOTELS CORPORATION ) File No. BTCCT-970304IC
)
For Consent to Transfer of Control )
)
)
MEMORANDUM OPINION AND ORDER
ADOPTED: October 15, 1997 RELEASED: October 15, 1997
By the Commission:
INTRODUCTION
1. HLT Corporation (HLT), a wholly-owned subsidiary of
Hilton Hotels Corporation (Hilton), seeks to acquire control,
by an unsolicited tender offer or a proxy contest, of ITT
Corporation (ITT), which, through its wholly-owned subsidiary
ITT Broadcasting Corporation (ITT Broadcasting), holds a 50%
general partnership interest in ITT-Dow Jones Television, the
licensee of WPXN-TV, Channel 31, New York, New York. To
facilitate the attempted acquisition, HLT and Hilton filed on
March 4, 1997, a supplemented short-form application, FCC Form
316, in connection with their attempt to replace, via a proxy
contest, ITT's current board of directors with a slate of
proposed nominees who favor the merger of ITT with HLT or
Hilton.1 ITT filed an informal objection to the FCC Form 316
short-form application submitted by HLT and Hilton in
connection with the proxy contest, and HLT and Hilton have
replied to ITT's objection. After review of the short-form
application and all pleadings, we conclude that Hilton's
application and its proposed slate of nominees satisfy the
criteria we have prescribed for such insubstantial transfers of
control, and that our consent to the proposed transfer is
therefore warranted. Our action, of course, is permissive in
nature and reflects no endorsement by the Commission of any
particular nominee or slate of nominees.
BACKGROUND
2. ITT, a Nevada corporation, is a publicly and widely
traded company engaged in the hotel,
_____________________
1 Also on March 4, 1997, Hilton and HLT filed another
supplemented FCC Form 316, with a request that the Commission
grant, pursuant to our policy governing hostile tender offers,
a special temporary authorization permitting a transfer of
control of ITT's interest in the licensee of WPXN-TV from ITT's
current shareholders to the trustee of a voting trust. See
File No. BTCCT-970304IA. On that same date, HLT and Hilton
filed a long-form application, FCC Form 315, seeking Commission
consent to the acquisition of ITT Broadcasting by HLT. See
File No. BTCCT-970304IB. These applications are not at issue
in this order.<PAGE>
FEDERAL COMMUNICATIONS COMMISSION FCC 97-381
_______________________________________________________________
gaming and entertainment business and the information services
business. Its wholly-owned subsidiary ITT Broadcasting in
partnership with Dow Jones & Company, Inc., purchased
television station WPXN-TV in New York City in July 1996.
Other than its interest in the licensee of television station
WPXN-TV, ITT and its affiliates hold no other FCC licenses.2
Hilton, a Delaware corporation, is the owner and operator of
numerous hotels and gaming properties throughout the United
States and in various international cities. HLT, a wholly-
owned subsidiary of Hilton, is a newly incorporated Delaware
corporation organized in connection with the tender offer for
ITT, and has not carried on any activities other than in
relation to the tender offer and proxy contest.
3. In late 1996, Hilton expressed interest in discussing
a potential business combination with ITT, but ITT indicated it
did not wish to pursue such a combination. On January 27,
1997, Hilton informed ITT, by telephone and in writing of the
terms of the proposed tender offer and merger. On February 11,
1997, Hilton and HLT delivered to ITT a written notice of
intention to nominate their candidates for election to the ITT
board of directors. Hilton and HLT also filed suit against ITT
in Nevada federal district court seeking an injunctive and
declaratory relief to, inter alia, forestall any effort by ITT
to amend its by-laws, postpone its annual shareholders'
meeting, or take any other action to frustrate the proxy
contest that Hilton intends to conduct to replace the ITT board
of directors. The Nevada district court denied on April 21,
1997, Hilton's motion for preliminary injunction to require ITT
to hold its annual shareholders' meeting in May, and this
denial was subsequently affirmed on appeal. In an order dated
October 2, 1997, the Nevada court ordered, inter alia, that
ITT's annual shareholders' meeting shall be held no later than
November 14, 1997. Following the district court's order, ITT
announced that its annual shareholders' meeting will be held on
November 12, 1997.
PROXY CONTEST
4. Section 310(d) of the Communications Act of 1934
(Act), 47 U.S.C. Section 310(d), mandates that Commission
consent to be obtained prior to a transfer of control of
licensed stations. In Committee for Full Value of Storer
Communications, Inc., 101 FCC2d 434, 443-48 (Storer I), aff'd
sub nom. Storer Communications, Inc. v. FCC, 763 F.2d 436 (D.C.
Cir. 1985) (Storer II) we determined that, while the use of a
proxy mechanism to effectuate a precipitous replacement of the
entire board of a corporation constituted a transfer cognizable
under Section 310(d), such a change was not substantial and
therefore did not acquire use of long-form procedures.
Instead, we determined in Storer to acquire the submission of a
short-form application, supplemented by information on the
citizenship, other attributable media interests, and adverse
findings regarding law violations on the part of the proposed
board nominees. Subsequently, in our Tender Offers and Proxy
Contests (Tender Offers) policy statement,3 we reexamined
Storer I and II, and concluded that the Commission should
"continue to use the modified short form procedural approach
utilized in Storer in conjunction with insubstantial transfers
of control resulting from proxy contests." Tender Offers, 59
RR2d at 1552. Pursuant to this procedure previously
established by the Commission, HLT has submitted a short-form
application, supplemented with information concerning the
citizenship, attributable media interests and adverse legal
findings of the slate of proposed nominees
________________________
2 On May 12, 1997, ITT and Dow Jones & Company, Inc.
announced that they had reached a definitive agreement to sell
WPXN-TV to Paxson Communications Corporation. The application
to assign the license of WPXN-TV from ITT-Dow Jones Television
to a Paxson subsidiary was later filed with the Commission and
remains pending.
3 59 RR 2d 1536 (1986), appeal dismissed sub nom. Office of
Communication of the United Church of Christ v. FCC, 826 F.2d
101 (D.C. Cir. 1987).
2<PAGE>
FEDERAL COMMUNICATIONS COMMISSION FCC 97-381
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to the ITT board.
5. ITT's Objections. In its objections, ITT asserts
that, contrary to HLT's position, the Commission in Storer I
did not determine that replacing the board of directors of a
company always constituted an insubstantial transfer of
control. Rather, according to ITT, the Commission and the
Court of Appeals in Storer II emphasized that transfer of
control issues are "critically dependent upon the specific
factual circumstances of each case," Tender Offers, 59 RR2d at
1543, and must be determined "on a case-by-case basis." Storer
II, 763 F.2d at 442. ITT asserts that HLT has not provided
sufficient information in its short-form application for the
Commission to conclude that the transfer resulting from a
successful proxy contest would be an insubstantial transfer of
control.4 Unless such information is provided, ITT contends
that HLT's short-form application must be denied.
6. According to ITT, if the Commission chooses to act on
the limited information provided by HLT, then the application
must be denied because, unlike Storer I/II, the result of a
successful proxy contest would be a substantial transfer of
control of the licensee of WPXN-TV to HLT, which requires a
long-form application. In Storer I/II, the proposed new board
was pledged to maximize value to the shareholders by
liquidating the assets of Storer Communications, but no
specific transactions had been planned and no buyers identi-
fied. In this case, the Hilton nominees to the ITT board are
committed to supporting the tender offer and merger of ITT with
Hilton or HLT. Given this commitment, ITT argues that
approving the proxy solicitation is the same as approving the
underlying transaction, which of course requires a long-form
application. Because HLT's proxy solicitation specifically is
intended to facilitate the transfer of stock from ITT
shareholders to Hilton, and ultimately the merger of ITT into
another company, then the Commission should, ITT contends,
conclude that a successful proxy solicitation would result in a
substantial change of control and that HLT's short-form
application must accordingly be denied.5
7. Reply of Hilton and HLT to ITT's Objections. In
reply, Hilton asserts that ITT's arguments are inconsistent
with both the Tender Offers and Proxy Contests policy statement
and judicial precedent. Specifically, Hilton argues that,
under Storer I/II, its planned proxy contest involves an
insubstantial change of control.
8. Discussion. After review of the short-form of
application and the related pleadings, we will grant HLT's
application filed to facilitate its planned proxy contest. As
an initial matter, we do not agree with ITT that HLT has not
provided sufficient information in its application. HLT's
application states that it intends to nominate and solicit
proxies for the election of a slate of nominees to the ITT
board who support the tender offer and the ultimate merger of
ITT with HLT or Hilton, subject to the new directors' fiduciary
duties to consider competing offers that may be made. In
addition, HLT's supplemented short-form application includes,
as required by the Tender Offers policy statement, information
concerning the
_______________________
4 In particular, according to ITT, HLT has not provided a
full description of the reasons for the proxy contest, the
actions that the new directors would take if elected, or the
nature of the ties and relationships between the proposed ITT
directors and Hilton.
5 In a letter to the Commission dated March 31, 1997, ITT
reiterated this argument, and, to illustrate further the
commitment of Hilton's proposed ITT board nominees to support
the tender offer and merger, attached the final proxy statement
filed by HLT and Hilton with the Securities and Exchange
Commission on March 21, 1997. We will deny Hilton's motion
filed April 4, 1997, to strike this letter as an unauthorized
pleading, and will consider the letter in the interest of
considering all relevant facts and information. We have also
similarly considered all subsequent pleadings and supplemental
information filed by the parties pertaining to the proxy
contest short-form application.
3<PAGE>
FEDERAL COMMUNICATIONS COMMISSION FCC 97-381
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citizenship, attributable media interests and adverse legal
findings on the part of its proposed nominees.6 Moreover,
additional information on HLT's proposed board nominees and
their ownership of, and recent transactions involving, ITT and
Hilton stock has been included in Hilton's Tender Offer
Statement filed with the Securities and Exchange Commission, a
copy of which has been provided herein.7 We find this informa-
tion provided by HLT to be sufficient under our standards
enunciated in the Tender Offers policy statement.
9. We also conclude that the transfer of control that
would result from the proxy contest, if successful, would not
be a substantial transfer of control requiring a long-form
application. As stated in Storer I, any change of control
resulting from HLT's proxy contest would involve
no change in the shareholders' ownership or voting
rights. The change is limited to the composition of
the Board of Directors, who are fiduciaries of the
shareholders . . . . Any resulting change in the
Board arises from the shareholders' exercise of their
substantial control, not a transfer of the same. Not
only will [ITT's] shareholders -- who retain ultimate
and legal control -- remain the same, but the
corporate legal entity will remain unchanged by the
election of a new Board.
Storer I, 101 FCC2d at 445 (emphasis in original). We disagree
with ITT's contention that approving the proxy solicitation is
the same as approving the underlying ITT/Hilton merger.
Assuming that the proxy contest were to succeed and that the
new ITT directors were then to support, subject to their
fiduciary duties, a merger with Hilton, then ITT and Hilton
would need to obtain approval of the transfer of ITT's interest
in the licensee of WPXN-TV pursuant to a long-form application,
and the transfer of control of the licensee would not occur
until we granted such approval.
10. In our policy statement, we determined that, absent
"exceptional" circumstances, "proxy contests do not result in
substantial changes in corporate control and, therefore, long
form review is not statutorily mandated." Tender Offers, 59
RR2d at 1551. ITT has not persuaded us that any such
exceptional circumstances exist in the instant case, and
accordingly we will not require the review of a long-form
application in advance of the expected proxy contest. By
reviewing Hilton's proposed slate of directors prior to the
proxy fight, we of course take no position on the merits of
Hilton's proposals and remain "steadfastly neutral" as between
ITT's current board of directors and Hilton's proposed nominees
to ITT's board. Storer I, 101 FCC2d at 444. We merely seek to
comply with our statutory obligations and remove the Commission
from this contest for corporate control. Based upon our review
of the application and pleadings before us, and for the reasons
set forth above, we conclude that a grant of HLT's supplemented
FCC Form 316 application satisfies the applicable statutory and
public interest requirements. Both Hilton and ITT will
therefore be free to proceed to persuade the ITT shareholders
of the merits of their respective positions, without impediment
or assistance from this agency.
________________________
6 ITT points out that HLT has furnished no information about
significant nonattributable equity interests in media or other
"meaningful relationships" with other co-located media
interests that might trigger the Commission's cross-interest
policy. ITT's implication that cross-interest issues may exist
is, however, entirely unsupported and speculative.
7 Amendment No. 3 to Schedule 14D-1 to the Tender Offer
Statement provides more extensive information concerning the
Hilton board nominees, including, inter alia, their present
occupation and employer, business experience during the past
five years, and other directorships held by the nominees. This
information is also provided on Hilton's final proxy statement
filed with the Securities and Exchange Commission on March 21,
1997. ITT has not challenged the qualifications of any of
Hilton's proposed nominees to the ITT board.
4<PAGE>
FEDERAL COMMUNICATIONS COMMISSION FCC 97-381
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CONCLUSION
11. We have reviewed the short-form application and
related pleadings, and conclude that grant of HLT and Hilton's
request for approval of their slate of proposed nominees to the
ITT board would serve the public interest, convenience and
necessity.
12. Accordingly, IT IS ORDERED, That the informal
objection filed by ITT Corporation IS DENIED, and the
application (BTCCT-970304IC) of HLT Corporation and Hilton
Hotels Corporation IS GRANTED.
Federal Communications Commission
William F. Caton
Acting Secretary
5
