New York-based ITT is selling the lot to its business partner Cablevision Systems for $650m (pounds 405m) in cash and options and $115m in debt.
In January Hilton Hotels Corporation, based in Beverley Hills, California, launched a $10.5bn hostile takeover offer for ITT. The company rejected the bid as too low and said it would fight hard to remain independent.
By selling assets such as its interest in Madison Square Garden, where the Knicks and the Rangers play, ITT intends to reinvest the proceeds in its faster-growing casino and hotel businesses.
"$650m is a very good price," said Dennis Forst, an analyst at McDonald & Co in New York yesterday.
An ITT spokesman said more asset sales were planned. "We've brought in close to a billion dollars in the last 30 days, and there's still more to come," said Jim Gallagher, the company's spokesman, yesterday.
Cablevision Systems will increase its 50 per cent stake in Madison Square Garden to 88.5 per cent via the sale, and ITT has the right to sell Cablevision the rest for another $150m during the next two years.
Cablevision and ITT completed their joint acquisition of Madison Square Garden from Viacom, the media giant, for $1bn in March 1995. If it exercises its option to sell its entire stake, ITT, which has been criticised for over-paying for assets, would reap about $150m more than it paid.
ITT had planned to tie Madison Square Garden into its hotel and casino business, but this never materialised.
Analysts and investors have said Madison Square Garden was too regional in scope to provide any benefit to ITT's Ceasar's World casinos and Sheraton hotel chain, which are national or international brands.Reuse content