British hotels and gambling company Hilton Group said today it is in talks to sell its hotels to US group Hilton Hotels Corp.
Industry sources say the deal, which would reunite the Hilton brand after 41 years, would be a $6.3 billion cash deal.
"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.
Sources said 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.
The Hilton Group
Hilton shares in London were up 14 per cent at 350 pence earlier 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.
The US Hilton has been encouraged to approach the British group by an improving US hotels market and the need for it to expand outside its domestic market, sources said.
The Hilton business split in 1964, with the US company running all Hilton hotels in the United States and the UK company operating the brand elsewhere.
The two share an alliance to cover joint marketing, reservation and loyalty programmes and have for a number of years discussed a merger.
Hilton Hotels owns, manages and franchises more than 2,300 hotels, while the two Hilton companies operate a joint venture to expand the luxury Conrad brand which has about 20 hotels.