Ladbroke deal with Hilton on cards

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The Independent Online
A deal between Ladbroke's Hilton Hotels arm and the Hilton Hotels Corporation in the US looked increasingly likely last night after comments from Stephen Bollenbach, new head of the American operation, to a high- level industry conference.

Mr Bollenbach is reported to have said that he believed Hilton Corporation had "an underleveraged balance sheet". He confirmed that he was in discussions with Ladbroke on the subject of putting the two businesses together in some form and said he would like to see co-operation between the two.

Speculation that a deal might be close was fuelled by further remarks from Mr Bollenbach that he was keen to expand Hilton Corporation both inside and outside the US. He added that he felt the cost of debt in America was relatively cheap at the moment.

News of Mr Bollenbach's comments to a group of 70 large institutional investors, as well as representatives of hotel chains including Intercontinental and Marriott, emerged as Kleinwort Benson, organiser of the conference, issued its annual review of quoted hotel companies.

Kleinwort analysts Paul Slattery and Greg Feehely said they expected 1996 to be another strong year for the UK hotel industry. Company profits would be boosted by the tight supply of new hotel rooms and rising occupancy levels which would inevitably force room rates higher. During 1995, the broker said, while occupancy levels grew in line with expectations, room nights sold increased by 3.7 per cent to 31.35 million, the highest level since Kleinwort's records began.

Investment column, page 24

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