Sir Ian Robinson, the chairman of Hilton Group, faced a barrage of criticism yesterday from private shareholders over the decision to sell the company's hotels arm for £3.3bn and to turn Hilton into a pure betting business.
The sale to the US firm Hilton Hotels Corp, announced in December, reunites the Hilton US and international hotels businesses after 41 years and the British company with its Ladbrokes betting arm.
At an exceptional meeting called to approve the deal, Sir Ian was forced to justify the deal numerous times as private shareholders laid into the board. Alan Perryman, a member of the UK Shareholders' Association, asked: "Why have you performed a U-turn, why does the previous strategy [of running the hotels and gambling businesses together] no longer make sense?"
Sir Ian replied: "I don't think we have performed a U-turn," adding that the financial benefits from running the two businesses together had changed. "We had an extremely attractive offer for the hotels business and we will return a significant amount of cash to shareholders. Shareholders will significantly benefit and we believe the future of Ladbrokes will be a very positive one."
Donald Cruickshank, a private investor with holdings in many companies, said: "Money isn't the only thing. I became a shareholder originally because it was hotels. We don't want to sell Hilton Hotels." He also asked Sir Ian why he was pocketing a £10,000 salary increase, amounting to 4 per cent, to be chairman of a smaller business.
Patrick Lupo, an independent director on the board, defended the sale as representing 13 times Ebitda, which he said was high for the industry. Indeed, analysts have welcomed the deal as an excellent one.
The resolutions on the sale of the hotels business and renaming of the company as Ladbrokes were passed with nearly 100 per cent backing. All the institutional shareholders voted in favour.
The meeting became emotionally charged, with one private investor bursting into tears when he reminisced about taking his wife to a Hilton hotel on a discounted weekend break, a benefit investors will lose.Reuse content