HILTON BETS ON BALLY : PURCHASE TO GIVE FIRM BEACHHEAD IN ATLANTIC CITY.Byline: Gregory J. Wilcox Daily News Staff Writer In a deal that makes it the world's largest casino gambling company, Hilton Hotels
Terms call for a stock swap A stock swap also known as a share swap or equity swap is a business takeover in which the acquiring company uses its own stock to pay for the acquired company. valued at approximately $2 billion, with Hilton assuming or refinancing $1 billion in Chicago-based Bally's debt. Hilton pledged to complete a 4-for-1 stock split, with Bally shareholders receiving one share of Hilton stock, on a post-split basis, for every Bally share. The sale, already approved by directors at both companies, makes Beverly Hills-based Hilton a major player in the nation's two wagering meccas - Las Vegas Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States. and Atlantic City Atlantic City, city (1990 pop. 37,986), Atlantic co., SE N.J., an Atlantic resort and convention center; settled c.1790, inc. 1854. Situated on Absecon Island, a barrier island 10 mi (16. . Its gaming empire will stretch from Brisbane, Australia, to Istanbul, Turkey, with the headquarters remaining in Beverly Hills Beverly Hills, city (1990 pop. 31,971), Los Angeles co., S Calif., completely surrounded by the city of Los Angeles; inc. 1914. The largely residential city is home to many motion-picture and television personalities. . The industry has been ripe for a major consolidation, about the only way companies can expand their holdings in the lucrative domestic arena because major new markets are not opening up. Hilton will have 15 casinos worldwide with nearly 800,000 square feet of gambling space and 18,000 hotel rooms in those facilities. Chainwide it will have more than 100,000 hotel rooms. The company now owns 10 casinos. ``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,'' Stephen F. Bollenbach, Hilton's president and chief executive officer, said during a telephone interview from New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , where the deal was announced. ``We gain an important, immediate leadership position in Atlantic City through Bally's two existing properties - Bally's Park Place and The Grand. It brings tremendous value to our shareholders,'' he said. This will be Hilton's first foray into Atlantic City. ``In any industry, the big guys win, and it's very hard to claim you are the largest in the world without being in the second-largest market,'' he said of the New Jersey seaside resort. Hilton already has a big presence in Las Vegas, dominating almost a quarter-mile at the center of what is known as the ``Golden Mile of the Strip.'' Analysts said the deal, which still must be approved by stockholders and gaming regulators in several states, makes sense. ``A definite winner is Hilton Hotels,'' said Matt Segall, an analyst at Hancock Institutional Equity Services in Los Angeles. ``This is something where we've seen a good fit for some time. We've been waiting for consolidation to take place.'' Jason Ader, an analyst with Bear Stearns & Co. in New York, called it a ``terrific deal'' for Hilton. Over the past 12 months, the combined companies would have reported earnings from gaming of $537 million, not including the cash flow from Hilton Hotels, which would boost the total to $834 million. Bally's chairman Arthur M. Goldberg will become a director of the new company. And Hilton's Bollenbach, formerly chief financial officer at The Walt Disney Co., said this business combination won't shake out like those in the financial industry, which suffered mass layoffs. ``This is not putting two banks together and eliminating half of the tellers. This is a growing business,'' he said.``The economics in our business is not trying to reduce the number of blackjack blackjack, one of the world's most widely played gambling card games; also known as twenty-one or vingt-et-un. Despite contesting claims between the French and Italians, its origins are unknown. dealers. The economics is trying to have more blackjack tables.'' Hilton has casino projects under development in Kansas City, Mo., and Punta del Este Punta del Este (p  n`tä thĕl ās`tā), city (1996 pop. 8,252), E Uruguay, on the Atlantic Ocean. , Uruguay, scheduled to open in August and in January 1997, respectively. ``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 The Las Vegas Hilton is a hotel, casino, and convention center in Las Vegas, Nevada. It is a joint venture between Colony Capital, which owns 60 percent, and New York City-based REIT Whitehall Street Real Estate Funds, which owns the remaining 40 percent. , along with a new 22,000-square-foot casino. Bally is developing the Paris Casino-Resort, a 3,000-room complex featuring a 50-story re-creation of the Eiffel Tower adjacent to Bally's Las Vegas
CAPTION(S): 2 Photos Photo: (1--Color) Bally's Hotel and Casino in Las Vegaswill become part of Hilton Hotels Corp. (2--Color) Hilton CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Stephen Bollenbach, left, and Bally CEO Arthur Goldberg announce the sale in New York. Associated Press |
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