Shareholders seek to block Hilton sale |
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Sat, 07 Jul 2007 00:29
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LOS ANGELES (AP) - Two Hilton Hotels Corp. shareholders are suing the hotel operator, claiming its management and directors breached their fiduciary duty to stockholders when they agreed to sell the company to a private equity firm for $20.1 billion, a figure the shareholders contend is too low.The lawsuits, both filed Thursday in Los Angeles Superior Court, seek an order blocking Hilton's proposed sale to Blackstone Group LP., which the company revealed earlier this week.The suits, which seek class-action status, also ask the court to compel Hilton officials to seek a more lucrative offer for the Beverly Hills-based hotelier.Hilton Hotels CEO Stephen F. Bollenbach, the company's directors and other executives, and Blackstone, are named as defendants in both lawsuits.Calls to Hilton Hotels and Blackstone Group were not immediately returned Friday.Under the proposed buyout, Blackstone would pay Hilton shareholders $47.50 per share, in cash. Hilton's board approved the deal on Tuesday and it is expected to close in the fourth quarter, pending shareholder and regulatory approval.Still, Hilton agreed to pay Blackstone a $560 million fee if it backs out of the deal.In her lawsuit, shareholder Cristina Guiseppone takes issue with the proposed termination fee, saying it effectively ensures the sale of Hilton to Blackstone.Hilton Hotels operates more than 2,800 hotels around the world. The company generated $8.11 billion in revenue last year.Shares of Hilton Hotels rose 32 cents to $45.71 on Friday.Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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