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EXHIBIT 99.1
Grand Casinos, Inc. (ticker: GND, exchange: New York Stock Exchange) News
Release - Wednesday, October 14, 1998
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HILTON, GRAND CASINOS, INC. FILE PRELIMINARY JOINT PROXY, PROSPECTUS ON
GAMING SPIN-OFF, MERGER
- -- New gaming company named Park Place Entertainment Corporation
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BEVERLY HILLS, CALIF., OCTOBER 14, 1998 -- Hilton Hotels Corporation
(NYSE:HLT) and Grand Casinos, Inc. (NYSE:GND) today announced the filing with
the Securities and Exchange Commission of a preliminary joint proxy statement
and prospectus detailing Hilton's proposed separation of its lodging and gaming
operations and the new gaming company's proposed merger with Grand Casinos'
Mississippi operations. This document had previously been filed confidentially
with the SEC.
The transactions, are expected to be completed by year-end 1998, subject to
shareholder, regulatory and other approvals. Hilton is in the process of
obtaining a ruling from the Internal Revenue Service that the distribution of
the shares of the new gaming company will not be taxable to Hilton or Hilton
shareholders. Additionally, Grand Casinos, Inc. will separate its Mississippi
business from its Indian casino management business in a tax-free distribution
to its shareholders. The Indian casino management business along with various
other assets will form a new publicly traded company. Grand Casinos is in the
process of obtaining a ruling from the IRS that the distribution will not be
taxable to Grand Casinos shareholders. It is anticipated that proxy materials
will be mailed to shareholders later this month, with each company expected to
hold its respective shareholder meeting in late November. The record date for
shareholders of both companies has been moved from October 5 to October 20,
1998.
Among the information contained in the filing:
- The new gaming company, which will be the world's largest and
most diverse casino gaming entity, will be called Park Place
Entertainment Corporation. It will trade on the New York Stock
Exchange under the proposed ticker symbol "PPE."
- Park Place Entertainment's executive management team will
include the following:
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- Stephen F. Bollenbach, chairman of the board. Mr. Bollenbach
will retain his current position as president and chief
executive officer of Hilton Hotels Corporation following the
split.
- Arthur M. Goldberg, president and chief executive officer.
Mr. Goldberg currently is president - gaming operations for
Hilton Hotels Corporation.
- Wallace R. Barr, executive vice president. Mr. Barr is
executive vice president eastern region for Hilton's gaming
operations.
- Clive S. Cummis, executive vice president - law and
corporate affairs, and secretary. Mr. Cummis currently is
chairman of the law firm of Sills, Cummis, Zuckerman, Radin,
Epstein & Gross.
- Mark Dodson, executive vice president. Mr. Dodson currently
is executive vice president and treasurer for Hilton Gaming
Corporation.
- Scott A. LaPorta, executive vice president and chief
financial officer. Mr. LaPorta currently is senior vice
president and treasurer for Hilton Hotels Corporation.
Additionally, Grand Casinos chairman Lyle Berman will serve on Park Place
Entertainment's Board of Directors and current Grand Casinos president and CEO
Thomas Brosig will be in charge of Park Place's Mississippi-Louisiana-Missouri
operations.
Hilton also announced that upon the split, Matthew J. Hart, executive vice
president and chief financial officer for Hilton Hotels Corporation, will also
assume the responsibilities of treasurer for the lodging company.
- New long-term employment agreements, the details of which are
contained in the preliminary proxy statement/prospectus, will
be entered into with Messrs. Bollenbach and Goldberg. The
agreements, which are primarily stock-option based and
therefore aligned with the interests of the shareholders,
include cash compensation (base salary plus bonus), incentive
(or "performance") stock options, other standard benefits and
non-compete agreements.
Following completion of the transactions, Hilton Hotels Corporation will
maintain its position as one of the world's foremost lodging companies. The
company owns, manages or franchises approximately 260 hotels in the United
States, including ownership of some of the world's most renowned properties,
such as the Waldorf=Astoria, Hilton San Francisco and Towers, Hilton Hawaiian
Village and Chicago's Palmer House Hilton. Hilton will continue to pursue a
growth strategy centered on acquiring full-service hotels in markets seeing
little new supply. So far this year, Hilton has purchased approximately $860
million of hotel properties at attractive prices. The company also will continue
aggressively building its franchise program in the U.S., Canada and Mexico,
which includes the company's successful Hilton Garden Inn program,
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which is expected to have 200 hotels open or under contract by 2000.
Additionally, Hilton will focus on enhancing the worldwide presence of its brand
name through the company's strategic alliance with Hilton International. Pro
forma 1997 EBITDA for Hilton's lodging business was $497 million, with pro forma
1998 EBITDA (through June 30) of $295 million.
Park Place Entertainment Corporation will be the world's largest (as measured by
revenues) and most diverse gaming company. In 1999, the company will have 18
gaming properties with a total of 1.4 million square feet of casino space and
more than 23,000 hotel rooms. Park Place will be the only casino gaming company
with a leading presence in Las Vegas, Atlantic City and Mississippi -- the three
largest gaming markets in the U.S. -- along with casinos in Louisiana, Missouri,
Australia, Uruguay and other Nevada markets. As a leading participant in the
rapidly consolidating gaming business, Park Place's growth strategy will focus
on strategic acquisitions and new development. As an example of the latter, the
company's new $760 million Paris Casino Resort ($400 million expended to date)
is scheduled to open in fall 1999 on the Las Vegas Strip adjacent to Bally's Las
Vegas. Through its significant presence in the largest gaming markets, the
origination of Park Place's cash flows will be geographically diverse. Pro forma
EBITDA for Park Place Entertainment (including Grand Casinos' Mississippi
operations) for the 12 months ended June 30, 1998 was $681 million, with debt of
$2.2 billion.
NOTE: This press release contains "forward-looking statements" within the
meaning of federal securities law, including statements concerning business
strategies and their intended results, and similar statements concerning
anticipated future events and expectations that are not historical facts. The
forward-looking statements in this press release are subject to numerous risks
and uncertainties, including the effects of economic conditions; supply and
demand changes for hotel rooms; competitive conditions in the lodging and gaming
industries, relationships with clients and property owners; the impact of
government regulations; and the availability of capital to finance growth, which
could cause actual results to differ materially from those expressed in or
implied by the statements herein.
# # #
Contact:
Marc Grossman Kathy Shepard Jaye Snyder
Hilton Hotels Hilton Hotels Grand Casinos,
Corporation Corporation Inc.
310-205-4030 310-205-7676 612-449-8556
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995: Statements in this press release regarding
Grand Casinos, Inc.'s business which are not historical facts are
"forward-looking statements" that involve risks and uncertainties.
For a discussion of such risks and uncertainties, which could cause
actual results to differ from those contained in the
forward-looking statements, see "Risk Factors" in the Company's
Annual Report or Form 10-K for the most recently ended fiscal year.
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