clarinews@clarinet.com (02/08/90)
MEMPHIS, Tenn. (UPI) -- The Promus Cos. Inc., parent company of Harrah's casinos and hotels and three hotel brands, was created Wednesday as the final step in a $2.2 billion deal with Bass PLC of London. The deal, announced last August, gives Britain's largest brewer control of the Holiday Inn hotel chain. The new company will begin trading Thursday on the New York Stock Exchange on a when-issued basis. Bass's American Depository Receipts also is scheduled to being trading on the NYSE Thursday. On its final day of trading, Holiday closed at 63 7/8, up 5/8. The spinoff occurred immediately before Wednesday's closing of Bass's acquisition of Holiday Inns through a merger between Holiday Corp. and a Bass subsidiary. As a result of the transaction, former Holiday Corp. stockholders will receive one share of Promus stock, a one-quarter share of Bass stock for each share of Holiday stock owned and a one-time $30 dividend to be paid by Feb. 22. Promus becomes the parent company of Harrah's in Atlantic City, N.J., and Las Vegas an the Embassy Suites, Hampton Inns and Homewood hotel brands. Promus will be managed by Holiday's former senior management team. ``From this day forward, our new company will be committed to a level of service excellence unprecedented in these industries, a level that will further reinforce the leadership position our casino gaming and hotel brands currently enjoy,'' said Michael Rose, chairman and President of Promus. Since opening its doors in 1952 in Memphis, Holiday Inns has grown into a 1,400-hotel empire. The success of Holiday helped spark growth of other chains that now proliferate in the moderately priced hotel market and convinced Holiday executives to sell its flagship Holiday Inn brand to concentrate on gaming and potential growth in the all-suite hotel market. About $60 million of Holiday Corp. debt has been assumed by Promus, and executives of the new company said earlier in the week they have verbal commitments from U.S. and foreign banks totaling $1.7 billion to provide debt service, working capital and capital expenditure money.