SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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
Commission file number: 1-7244
BALLY ENTERTAINMENT CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-2512405
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8700 West Bryn Mawr Avenue, Chicago, Illinois 60631
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 399-1300
Page 1 of 2
Exhibit Index on Page 2
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BALLY ENTERTAINMENT CORPORATION
FORM 8-K
Current Report
Item 5. Other Events
On June 6, 1996, Bally Entertainment Corporation ("Bally")
announced that it had entered into an Agreement and Plan of Merger
(the "Merger Agreement") dated as of June 6, 1996 with Hilton
Hotels Corporation ("Hilton"), 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 one share of newly authorized Preferred
Redeemable Increased Dividend Equity Securities, 8% PRIDES,
Convertible Preferred Stock of Hilton.
A copy of the news release relating to the Merger Agreement is
attached as Exhibit 99 hereto and is incorporated herein by
reference.
Item 7. Financial Statements and Exhibits
c. Exhibits
99 News Release dated June 6, 1996
SIGNATURE
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.
BALLY ENTERTAINMENT CORPORATION
---------------------------------------
Registrant
Dated: June 12, 1996 /s/ James S. Montana, Jr.
----------------------------------------
James S. Montana, Jr.
Senior Vice President and General Counsel
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EXHIBIT 99
FROM: Hilton Hotels Corporation
World Headquarters
9336 Civic Center Drive
Beverly Hills, California 90210
Telephone 310/205-4545
Reservations 1/800-HILTONS
CORPORATE NEWS
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 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 rooms 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
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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.
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, New York Hilton, Fontainebleu Hilton 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.
# # #
Contact: Marc A. Grossman Lee S. Hillman
Senior Vice President - Executive Vice President
Corporate Affairs Bally Entertainment Corp.
Hilton Hotels Corp. 312-399-7615
212-872-4600
or 310-205-4012
