US Hilton to buy hotels from British namesake

Hilton Hotels Corp. of the US agreed yesterday to buy the hotels of its British namesake for £3.3 billion in an expected deal that leaves the UK group with its gambling business Ladbrokes.

In mid-October, Britain's Hilton Group plc announced it had received an offer from the US Hilton, which sources close to the deal said at the time valued the UK company's hotels at £3.6 billion, although the UK group then sold around £400 million of hotel assets.

The deal will reunite the Hilton brand after more than 40 years. The Hilton business split in 1964 with the US company running all Hilton hotels in the US and the UK group operating the brand elsewhere around the world.

"We believe this transaction delivers significant shareholder value. The board is fully committed to Ladbrokes, which it believes is a strong and valuable business which will be well placed to deliver growth and good returns," said Hilton Group's Chairman Ian Robinson in a statement.

Hilton Group plc shares closed 1.2 per cent up at 368-3/4p in London after the deal was announced minutes before the London close. They had risen from around 305p before talks between the two groups were confirmed in October.