Case Solution for The Hilton-ITT Wars

Complete Case details are given below :

Case Name :      The Hilton-ITT Wars
Authors :           Robert F. Bruner, Sean Carr, Sanjay Vakharia
Source :             Darden School of Business
Case ID :           UV0083
Discipline :        Finance
Case Length :    32 pages
Solution Sample availability : YES
Plagiarism : NO (100% Original work)
Description for case is given below :
This case provides a vehicle for discussing analytical approaches to understanding bidding strategies in a hostile tender offer setting. In 1997, Hilton Hotels Corporation offered to acquire ITT Corporation in an unsolicited tender offer. ITT resisted in several ways. At the date of the case (July 17, 1997), ITT announces a restructuring of the firm aimed at delivering about $70 a share to its shareholders. The task for the student is to understand why Hilton’s takeover attempt has failed thus far, and what the possible responses might be at this stage. The case contains a completed valuation analysis of ITT (prepared by the casewriter), which suggests that ITT is worth, at most, $89 a share to Hilton. In preparing a possibly higher bid for the firm, the student must weigh the probability of another bidder’s entering the fray and that competitor’s bid price. The instructor can use this setting to compare the target shareholders’ outlook with the classic “prisoner’s dilemma” and to discuss the expected value of not tendering–both concepts are important in devising a bidding response.
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