SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________
Schedule 14D-1
Tender Offer Statement
(Amendment No. 42)
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) 65,000,000 shares of Com-
mon Stock, no par value (the "Common Stock") of ITT Corpora-
tion, a Nevada corporation (the "Company"), and (ii) unless and
until validly redeemed by the Board of Directors of the Com-
pany, 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
$80 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 as-
signed such terms in the Offer to Purchase and the Schedule
14D-1.
Item 10. Additional Information
Parent hereby amends the terms of the CVP Shares (as
set forth in Annex I to the Second Supplement) as follows:
"Valuation Period" means the 30 consecutive
trading day period immediately preceding (but not includ-
ing) the Redemption Date.
"Current Market Value" means the volume-weighted
average of the prices per share of Hilton Common Stock for
all trades reported on the NYSE (or such other exchange on
which shares of Hilton Common Stock are then listed) of
shares of Hilton Common Stock during the Valuation Period.
"Liquidation Preference" means the lesser of (i)
the amount, if any, by which the Target Price exceeds the
Current Market Value (determined as if the Valuation Pe-
riod were the 30 consecutive trading day period im-
mediately preceding (but not including) the date of liqui-
dation), and (ii) the Maximum Redemption Amount, subject
to a minimum liquidation preference of $1 per share.
With respect to the Form of Payment, in the case
of redemptions of the CVP Shares payable in cash or Hilton
Common Stock, the Issuer shall be required to announce no<PAGE>
later than the last business day preceding the start of
the Valuation Period whether such redemption amounts shall
be paid in cash or Hilton Common Stock, or a combination
thereof (specifying the percentages of each to be used).
Item 11. Material to be Filed as Exhibits.
(a)(45) Definitive Additional Proxy Material.
-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: November 10, 1997
HILTON HOTELS CORPORATION
By: /s/ Matthew J. Hart
Name: Matthew J. Hart
Title: Executive Vice President
and Chief Financial Officer
-3-<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: November 10, 1997
HLT CORPORATION
By: /s/ Arthur M. Goldberg
Name: Arthur M. Goldberg
Title: President
-4-<PAGE>
Exhibit Index
Exhibit Description
(a)(45) Definitive Additional Proxy Material.<PAGE>
Exhibit (a)(45)
VALUATION OF A COMBINED ITT/STARWOOD
Attached is an earnings-based valuation analysis of a com-
bined ITT/Starwood, derived from information disclosed by Star-
wood and ITT and from previously-issued analysts' reports on
estimated ITT and Starwood 1998 results. In fact, we believe
certain of this information overstates the likely earnings of
the combined entity for 1998 and thus inflates the valuation.
For example:
- We have credited the combined entity with $90 million
of tax savings related to "inter-company debt" of
Starwood Corporation to Starwood Lodging Trust (the
pro forma financials in the Starwood proxy imply that
this debt related to the ITT assets will be approxi-
mately $3.0 billion). However, if Congress deter-
mines that Starwood's grandfathered "paired-share
REIT" status should not apply to the expanded ITT
operations, this tax savings would not be realized.
We also have not included any tax liabilities that
may result from Starwood's proposed $1.5 billion div-
idend.
- We have credited the combined entity with $75 million
of savings due to "synergies" in 1998 even though we
think these savings are questionable (and note that
Starwood has not included such savings in its pro
forma financials as filed with the SEC).
- For purposes of this analysis, we have accepted Star-
wood's FFO projections, which we believe are aggres-
sive.
Nevertheless, even on this basis the analysis shows 1998
earnings per share of only $1.43. Using the earnings multiple
of Marriott International, this implies an ITT/Starwood stock
value of $32.27.<PAGE>
<TABLE>
<CAPTION>
1998P MULTIPLE ANALYSIS
================================================================================
<S> <C> <C>
HOT/Westin ITT
========== ===
FFO $296 (1) --
Minority Interest (10) (2) --
Real Estate D&A (252) (2)(3) --
========== ==========
Net Income $34 $346 (4)
Shares Outstanding 74 (2) 117 (5)
EPS $0.46 $2.95
EBITDA $448 (2) $1,237 (4)
==================================================================================
</TABLE>
<TABLE>
<S> <C> <C> <C>
HOT/Westin Net Income $34 HOT/WESTIN/ITT ENTERPRISE VALUE
ITT Net Income 346 Market Value of Equity @ $32.27 $6,599
======== Plus: Total Pro Forma Debt from Proxy 7,821
$380 Plus: Additional Cash from Revised Offer 1,230
After Tax Adjustments Plus: Option Cash Out 347
Synergies $45 (6) Plus: Severance 165
Incremental Interest Expense =======
Debt from Merger (134) (7) Total Enterprise Value $16,163
Option Cash Out/Severance (23) (8)
Goodwill (64) (9) HOT/WESTIN/ITT EBITDA (incl. synergies) $1,760
Tax Savings 90 (10)
======== ==================================================
HOT/WESTIN/ITT Net Income $293 1998 TEV/EBITDA 9.2x
==================================================
Outstanding Shares 204 (11)
HOT/WESTIN/ITT NET INCOME PER
SHARE $1.43
</TABLE>
<TABLE>
<CAPTION>
CONSIDERATION RECEIVED PER ITT SHARE*
==================================================
MULTIPLE HOT/WESTIN/ITT CASH STOCK TOTAL CONSIDERATION CONSIDERATION PV
======== ============== ==== ===== =================== ================
<S> <C> <C> <C> <C> <C> <C>
Marriott Int'l 1998
P/E Multiple 22.5x $32.27 $22.50 $36.05 $61.55 $59.68
* Assumed closing on 2/28/98, discounted at 15% (stock
portion) and 5.3% (cash portion) to 11/12/97.
Exchange ratio of 1.117.
===================================================================================================
<FN>
(1) Represents $4.02 FFO per share as disclosed in HOT conference call dated October 20, 1997.
(2) Estimates from Credit Suisse First Boston, August 12, 1997.
(3) Real estate D&A includes Westin 6 month D&A of $43MM annualized.
(4) Estimates from Morgan Stanley Dean Witter, July 11, 1997.
(5) Corrected number of shares from HOT proxy.
(6) After tax value of $75MM synergies disclosed by HOT.
(7) $25.50 cash per share financed at 7.5% as per HOT proxy.
(8) Represents 8.7MM shares at a strike price of $44.93 financed at 7.5% as per HOT proxy.
$165MM pre-tax severance from ITT press release financed at 7.5% as per HOT proxy.
(9) Assumes $64MM of incremental goodwill amortization from HOT proxy.
(10) Estimated $90MM tax savings based on $3 Bn intercompany debt financed at 7.5% as per HOT proxy.
(11) Exchange ratio of 1.117 for outstanding ITT shares.
</FN>
</TABLE>
