Sep 19, 07 | 1:57 am
The retiring chief executive of Hilton Hotels Corp. will likely receive a severance payment of US$10.5 million after the proposed $20.1 billion acquisition of the company closes later this year, Hilton said Tuesday.
The deal with The Blackstone Group LP provides CEO Stephen Bollenbach with the payment if he is involuntarily terminated, as expected after the deal is complete, Hilton said in a filing with the U.S. Securities and Exchange Commission.
Shareholders are scheduled to vote Sept. 18 on the proposed buyout.
The filing was made in response to shareholder lawsuits that threatened to delay the vote, the company said.
Plaintiffs had said they would seek to delay the vote unless supplemental details about the proposed deal were disclosed.
The company said Bollenbach was scheduled to step down on Jan. 1 and would have continued as a consultant, receiving $4 million over five years.
Instead, Bollenbach will receive the $10.5 million severance, the company said.
Hilton also disclosed that president and chief operating officer Matthew Hart abstained from the July 3 board vote on the buyout because of the possibility of his remaining with the company after Blackstone takes control.
Hilton said it had agreed to pay Moelis Advisors $14.4 million in fees for its services providing the deal is approved by shareholders.
The company also said adviser UBS Securities LLC provided scenarios for the board assuming alternate purchase prices.
The company's management also estimated for the board that it had a sum-of-the-parts valuation of about $25.92 billion.
Shares of Hilton rose two cents to $46.03 in afternoon trading Tuesday. Shares of Blackstone rose $1.04 to $22.92.
