Hilton changes strategy

      LOS ANGELES -- Back in mid-1989, Chairman Barron Hilton dangled Hilton Hotels Corp. as takeover bait, but no one bit at his price for the hotels and casinos.
      By Feb. 1, 1990, when "do not disturb" signs replaced "for sale," Hilton's stock price had been cut nearly in half. The Beverly Hills company hunkered down to endure years of worldwide recession in the hotel business; a 1995 attempt to split off the casinos from the hotels also failed.
      Today, Hilton has become just the opposite, an aggressive raider of other hotel and gambling concerns, under the chief executive that Barron Hilton named a year ago, Stephen Bollenbach.
      It is, in fact, exhibit No. 1 in the rapid consolidation of the industry.
      "By the turn of the century, the number of companies that dominate the gaming universe you will be able to count on your fingers," analyst Marvin Roffman of Roffman Miller Associates said last week.
      Four months into the job, Bollenbach crafted a $3 billion takeover of Bally Entertainment Corp., outbidding ITT Corp., which had recently completed its own takeover of Caesars World. With the Bally deal barely done, Hilton offered $10.5 billion in cash and debt Monday for New York-based ITT, a former huge conglomerate pared down in 1995 to mainly hotel, casino and sports businesses.
      If the deal goes through, Hilton's holdings among other things would include three hotel-casinos on one of the busiest intersections of the Las Vegas Strip: the Flamingo Hilton, Bally's Las Vegas and Caesars Palace.
      Bollenbach said Tuesday that he's been up-front about his plans to grow Hilton through acquisitions in its core hotel-casino business.
      "We want our shareholders to understand this is 100 percent our strategy," he said in a conference call with reporters, reiterating his intent to sell ITT's sports businesses.
      ITT's 1995 revenues of $6.35 billion were more than four times Hilton's $1.46 billion -- but Hilton's $173 million profit easily exceeded ITT's $147 million. Gaming analysts had been predicting consolidation in the industry, but as of last year saw ITT as a survivor.
      Bollenbach is an opportunist, though, both in the jobs he's traded in quick succession and in the major corporate changes he's left behind.
      As Walt Disney Co.'s finance chief in 1995, he persuaded big cheese Michael Eisner to take on $10 billion in new debt for the $19 billion acquisition of Capital Cities/ABC. Before that, he helped carve up Marriott, landing as CEO of Host Marriott, which owns hotels and airport concessions.
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