BEVERLY HILLS, Calif. - According to a report in The Wall Street Journal, hotel giant Hilton Hotels Corp. is interested in buying Memphis, Tenn.-based Promus Hotel Corp. - a deal that could be valued at more than $2.4 billion.
Hilton, based in Beverly Hills, Calif., has been interested in Promus for some time, but never formally pulled the deal trigger. In 1998, Hilton posted revenue of $1.77 billion, while Promus recorded $1.1 billion in revenue for the same period.
Promus has some strong brands, including Embassy Suites, Doubletree, Homewood Suites and Hampton Inn. While the deal is not imminent, acquiring these brands could open the limited-service and all-suites segment of the travel market to Hilton.
As Promus' brands continue to make headway throughout the industry, its management has continued to make headlines since the company merged with Phoenix-based Doubletree Corp. in 1997. After only a year of attempting to work together, top execs from both companies left because of management problems.
In the past, Promus CEO Norman Blake has insisted the company was not for sale. However, according to the report, the hotel company's board remains in conflict, which has prompted discussions with Hilton. In May, Promus lowered its earnings outlook, which caused its stock price to plummet 18% in one day.