As reported by: Reuters
British hotels and gambling company Hilton Group Plc said on Friday it is in talks to sell its hotels to U.S. group Hilton Hotels Corp, which industry sources say would be a 3.6 billion-pound cash deal to reunite the Hilton brand after 41 years.

"The board confirms that it has received an indicative offer from Hilton Hotels Corporation, which it is currently evaluating," Hilton Group said in a statement.

The U.S. company also said in a brief statement it was in talks but both parties cautioned that a deal was not yet done.

However, sources close to the matter said the talks to buy the UK group's 400-plus Hilton and Scandic hotels were advanced, with UK Hilton shareholders likely to get cash and continuing to own shares in a renamed Ladbrokes, Britain's largest betting shop operator.

Hilton shares in London were up 14 percent at 350 pence by 0315 EDT as analysts said the deal would unlock value and the renamed Ladbrokes business would be re-rated compared with its rival betting shop operator William Hill Plc.

"This is just the catalyst Hilton shares need to unlock value and put Ladbrokes on a true rating. We see Hilton shares heading north today," one analyst said.

Hilton shares had risen 7 percent this year in London and closed on Thursday at 304-3/4 pence, valuing the whole group at 4.9 billion pounds.

The U.S. Hilton has been encouraged to approach the British group by an improving U.S. hotels market and the need for it to expand outside its domestic market, the sources added.


Article By: Reuters