The British In Bed With Hilton?

The Street's takeover target du jour is Hilton Hotels (HLT), which has climbed to the top of the rumor chart. Since early March, buyout buzz has propelled it from the low 60s to the mid-70s. The price spiked to more than 77 on Mar. 27 but eased to 743/4 on Mar. 28. What's really going on? A deal may be in the offing, or so say money managers who have been buying--and who have connections with pros in Las Vegas, where Hilton Hotels owns five casino-hotels.

They are convinced that a British outfit is about to make a bid of $90 to $100 a share. Earlier suggestions were that management might split up the hotel and casino operations--and sell off pieces--or merge Hilton with a large entertainment company. But now, the British concern, which has huge entertainment, gambling, and hotel interests, is said to be talking seriously about a deal.

Speculation began in earnest in November, after Hilton said it was considering moves to enhance shareholder value, including the sale of the company. The stock, which traded in November at 57 a share, zoomed in just one day to 681/8.

One pro believes Chairman and CEO Barron Hilton is holding out for more money. "Price is what has been hampering a deal. Barron refuses to consider anything less than $100," says this manager. Barron Hilton controls 24% of Hilton's stock. Hilton declined comment.