Giant ITT goes ahead with three-way split

DAVID USBORNE

New York

The ITT Corporation, long one of America's most sprawling conglomerates, with interests ranging from insurance to casinos, confirmed yesterday that it intends spinning off its businesses to create three distinct publicly- owned companies.

The devolution of ITT will be one of the biggest in corporate history, involving annual sales of about $25bn. The company hopes to complete the process by the end of the year.

It has been known for some weeks that ITT's chairman, Rand Araskog, has been eyeing a three-company strategy. Mr Araskog will emerge as head of the most exciting-looking of the three new units. It will retain the ITT Corp name and include the hospitality and entertainment activities, including Sheraton Hotels and Caesar's World.

The other two groups to emerge will be the ITT Hartford insurance group and ITT Industries - the automotive, electronics, defence and fluid technology businesses.

Announcing the move, Mr Araskog promised it would be carried out "swiftly and smoothly". He added: "The end result for the long-term future is going to be very positive for each of these companies." Under the plan, holders of ITT common stock will get one share in each of the three new companies.

The reorganisation will allow Mr Araskog to develop his own priorities in the hotel and entertainment sector.

He recently vowed to make ITT "one of the premier hospitality, gaming and entertainment companies in the world". Recurrent rumours that ITT is interested in buying the ailing CBS television network have, however, been denied.

Adding to its worldwide Sheraton chain, ITT bought the Caesar's World gambling business for $1.7bn last December. Caesar's World operates casinos in Las Vegas, Nevada, and Atlantic City, New Jersey.

Also last year, Mr Araskog oversaw the purchase, in partnership with Cablevision Systems, of the Madison Square Garden sports and concert complex in Manhattan.

For ITT Hartford, meanwhile, the shake-up means the recovery of its independence, which was lost a quarter of a century ago.

Wall Street expects the transaction to be a boon for shareholders. In early trading yesterday, ITT shares rose to $113.625 from Monday's close of $109.24. It is thought likely that the shares of the three new companies together will be worth closer to $140.

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

Laughter, but no tears, as Letterman takes his bow after 33 years

Veteran talkshow host steps down to plaudits from four presidents
Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

Hozier's 'blasphemous' song takes Novello award

Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

Join the tequila gold rush

The spirit has gone from a cheap shot to a multi-billion pound product
12 best statement wallpapers

12 best statement wallpapers

Make an impact and transform a room with a conversation-starting pattern
Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

Paul Scholes column

Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?