Hilton in talks to buy Circus Merger would create U.S. gaming giant

March 14, 1998|By BLOOMBERG NEWS

BEVERLY HILLS, Calif. -- Hilton Hotels Corp. said yesterday that it is in talks to buy Circus Circus Enterprises Inc., a purchase likely to total more than $4 billion and add well-known casino resorts such as Luxor to its gaming business.

Hilton said that if a deal is concluded, it would separate its hotels and casino resorts in a tax-free spinoff. The gaming company would then combine with Circus Circus, one of the biggest casino operators, through a stock swap.

Combining Hilton's casino operations with Circus Circus would create the largest U.S. gaming company by far. It would be the biggest in Las Vegas, the leading gaming market. Circus Circus also owns a mile of land along the strip to be developed.

No agreement has been reached and many key elements of the potential transaction haven't been resolved, Hilton said. Hilton said it wouldn't give any other details and Circus Circus didn't return telephone calls.

Chief Executive Steve Bollenbach needs to make a bold move to reinvigorate Hilton's stock, which has languished since its 10- month hostile pursuit of ITT Corp. failed in November.

"He had to come up with a big deal," said Peter Marron, senior vice president of Pinnacle Associates, which held 236,000 shares.

Bollenbach, who engineered the split of Marriott Corp. into two separate parts, may have more up his sleeve, investors and analysts said.

Hilton's shares rose $1.8125 to $34.8125 on the New York Stock Exchange, while Circus Circus gained 56.25 cents to $25.75.

Pub Date: 3/14/98

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