FOOL PLATE SPECIAL
An Investment Opinion by MF Templar

Hilton Gets Hostile

HILTON HOTELS (NYSE: HLT) made a hostile bid for ITT CORP. (NYSE: ITT) after the market closed yesterday, causing shares of ITT to rocket more than $15 in after hours trading. Today the shares are down marginally from their after-hours close, but stand $14 3/4 higher than the $42 7/8 the stock closed on Monday at 4:00 PM Eastern. Prior to this offer, ITT Corp. was hovering right above its 52-week low of $40. Shares are well off of their April 1996 highs in the low $60s, and many analysts agree that Hilton's $55 per share offer is a steal. The reason why ITT Corp. currently trades above the offer price is because many traders are already betting that Hilton will raise its offer to $60 given the asset values involved.

Hilton's cash and stock offer of $55 a share roiled investors, who had thought ITT was far too large to be purchased in a hostile takeover. Hilton announced that it would begin a cash tender offer for 50% of ITT's outstanding shares despite protests from ITT's management suite. Although some are concerned that ITT's entertainment assets like Madison Square Garden and DOW JONES (NYSE: DJ) joint-venture television station WBIS could get the short shrift if auctioned off by Hilton. ITT Corp. essentially retained many of the non-strategic assets the former ITT Corp. held before it broke itself into three separate companies in late 1995. Many analysts are surprised by Hilton Chief Executive Steve Bollenbach's aggressive move for ITT Corp. given that Hilton just completed the acquisition of Bally Entertainment Corp., making Hilton the largest gaming company in the world.

Hilton is up $3 1/4 to $28 1/2 this morning, almost double the level it traded at 12 months ago when the company decided not to break itself into separate hotel and gaming units. Former DISNEY (NYSE: DIS) executive Steve Bollenbach has kept the company together and created shareholder value through growth in operations, acquisitions and systematic stock repurchases. Ironically, the reason ITT Corp. stands vulnerable today is because of ITT's move more than a year ago to break itself into three pieces, an event that has now left the gaming chunk of the company open to a "bear hug" from Hilton. A bear hug is when one company tries to push another into merger talks after friendly efforts have failed. If Hilton is successful and the deal clears regulatory hurdles, this will be the largest hostile takeover ever, worth $10.5 billion including ITT's $4 billion in debt. AT&T'S (NYSE: T) purchase of NCR (NYSE: NCR) in 1990 for $7.4 billion is the current record.

UPS

BARNES & NOBLE (NYSE: BKS) climbed $1 1/2 to $30 1/2 after the book retailer announced a pact with AMERICA ONLINE (NYSE: AOL) to become the exclusive bookseller on the online service. America Online gained $2 to $36 1/4.

HERSHEY FOODS CORP. (NYSE: HSY) rose $1 1/2 to $45 1/8 after reporting Q4 earnings per share (EPS) of $0.74 and gaining a Merrill Lynch upgrade.

Following an SEC filing showing that Fidelity Investments owns over 5% of the Russian cellular communications company, VIMPEL COMMUNICATIONS (NYSE: VIP) rose $1 3/4 to $36.

HEALTH MANAGEMENT ASSOCIATES (NYSE: HMA) rose $1 to $25 1/4 after the hospital operator announced the acquisition of a 125 bed facility in Alabama.

European semiconductor company SGS-THOMSON (NYSE: STM) gained $3 1/8 to $69 after its president made positive comments in the British paper The Financial Times.

DISNEY (NYSE: DIS) climbed $1 5/8 to $73 1/4 on reporting first quarter operating net of $0.98 per share, above estimates of $0.93-0.94.

Videoconferencing company C-PHONE CORP. (Nasdaq: CFON) rose $2 1/2 to $11 1/2 after announcing it has assembled its sales force to market its consumer products to general electronics retailers.

CANNONDALE CORP. (Nasdaq: BIKE) pedaled $1 7/8 higher to $25 1/8 as the bicycle maker reported Q2 EPS of $0.35, beating estimates of $0.32.

Semiconductor equipment manufacturer ASYST TECHNOLOGIES (Nasdaq: ASYT) rose $2 5/8 to $25 1/2 after reporting Q3 earnings of $0.32 per share before a charge for the closure of its Asyst Automation unit.

GTS DURATEK (Nasdaq: DRTK) gained $7/8 to $13 1/4 after the hazardous waste handling company said it has agreed to buy a unit of WESTINGHOUSE (NYSE: WX) for $28 million in cash and stock.

Networking products value-added-reseller POMEROY COMPUTER RESOURCES (Nasdaq: PMRY) rose $2 1/8 to $29 7/9 after announcing a $15 million contract yesterday.

INTEGRATED PROCESS EQUIPMENT CORP. (Nasdaq: IPEC) rose $1 13/16 to $25 13/16 after the semiconductor equipment company reported EPS from continuing operations of $0.09, and announced that it will exit certain non-core businesses.

Cardiac devices company PHYSIO-CONTROL INTERNATIONAL (Nasdaq: PHYS) rose $1 7/8 to $21 3/4 on reporting Q4 EPS of $0.29, ahead of estimates of $0.28 per share.

SMITH'S FOOD & DRUG CENTERS (NYSE: SFD) jumped $2 3/4 to $27 3/8 after reporting Q4 EPS of $0.48, beating estimates of $0.35.

IBM (NYSE: IBM) gained $6 7/8 to $152 5/8 after announcing a number of Lotus strategies yesterday, including initiatives with SUN MICROSYSTEMS (Nasdaq: SUNW), which gained $1 1/2 to $32 3/4.

DOWNS

Oil refiner and distributor GIANT INDUSTRIES (NYSE: GI) slipped $1 1/8 to $14 1/8 after pre-announcing a decline in Q4 EPS of up to 81%.

ANCOR COMMUNICATIONS (Nasdaq: ANCR) fell $2 7/8 to $10 5/8 after announcing that SEQUENT COMPUTER (Nasdaq: SQNT) canceled a contract to integrate one type of Ancor's fibre channel products.

Medical device maker KENSEY NASH CORP. (Nasdaq: KNSY) lost $4 5/8 to $10 1/4 after reporting earnings and announcing a product recall in the U.S.

WESTERN STAFF SERVICES (Nasdaq: WSTF) lost $1 3/4 to $8 1/2 following a Prudential Securities downgrade to "hold" from "buy" that came after the company announced the acquisition of an Australian staffing firm.

Lighting products company CHICAGO MINIATURE LAMP (Nasdaq: CHML) fell another $2 1/2 to $23 after yesterday's earnings disappointment.

MARCAM CORP. (Nasdaq: MCAM) lost $1 5/8 to $13 3/8 after the enterprise software company reported continued losses.

Financial software company INTUIT (Nasdaq: INTU) fell $2 3/8 to $28 1/2 after completing the sale of its transaction processing unit to CHECKFREE (Nasdaq: CKFR). The company also signed a deal with networker NEWBRIDGE NETWORKS (NYSE: NN) yesterday, according to Dow Jones.

PECO ENERGY (NYSE: PE) fell $1 5/8 to $22 3/8 after Oppenheimer downgraded the shares of the utility company to "underperform."

Drug store chain REVCO (NYSE: RXR) lost $1 7/8 to $37 as investors suspect that CVS (NYSE: CVS) may not offer a premium price in a potential merger offer.

HELD

Trading was halted this morning in shares of financial management software company QUADRAMED CORP. (Nasdaq: QMDC) after the company announced the departure of its President and Chief Operating Officer.

CONFERENCE CALLS

01/28/97 (Tuesday)
IOMEGA (NYSE: IOM)
(800) 633-8284 (reservation #2219792) -- replay

01/28/97 (Tuesday)
APPLIED DIGITAL ACCESS (Nasdaq: ADAX)
(402) 220-4850 -- replay

01/28/97 (Tuesday)
HILTON/ITT MERGER (NYSE: HLT, ITT)
1-800-642-1687 (reservation # 222615) -- replay avail. 1/28, 11AM EST thru 1/29

01/29/97 (Wednesday)
FORD MOTOR COMPANY (NYSE: F)
(703) 736-7226 -- replay on 1/30 @ 2:00 p.m. EST only

01/29/97 (Wednesday)
PRIME HOSPITALITY CORP. (NYSE: PDQ)
(800) 642-1687 (access code: 199532) -- replay through 2/5

01/29/97 (Wednesday)
ARVIN INDUSTRIES (NYSE: ARV)
(800) 633-8284 (reservation # 2331673) -- replay avail thru 2/5

01/29/97 (Wednesday)
CompUSA (NYSE: CPU)
(800) 642-1687 -- replay from 12:30 p.m. EST on 1/29 through midnight on 1/30

01/29/97 (Wednesday)
COMPUTER ASSOCIATES (NYSE: CA)
(Global Enterprise Mgmt Solution Announcement)
(888) 243-0816 -- replay avail 1/29 @ 2:30 PM EST thru 8:00 PM EST on 1/30

01/29/97 (Wednesday)
SEAGRAM LTD. (NYSE: VO)
(800) 394-6920 -- replay thru 9 PM EST on 1/31

HARLEY DAVIDSON (NYSE: HDI)
(402) 222-9913

ATLANTIC COAST AIRLINES (Nasdaq: ACAI)
replay avail thru 4:30 PM EST on 1/29
(800) 633-8284 (reservation # 2257486)

AVALON PROPERTIES (NYSE: AVN)
(402) 220-6017 -- replay avail through 1/28

CONTROL DATA SYSTEMS (Nasdaq: CDAT)
(402) 220-1003 -- replay thru 2/6

FOOL PORTFOLIO STOCKS

FOOL PORTFOLIO                BORING PORTFOLIO
ATCT up $1/4 at $12 1/2       BGP up $1 at $37 5/8
AOL up $2 1/4 at $36 1/2      CSL up $3/8 at $31 1/2
CHV down $1/2 at $65 3/4      CSCO up $2 1/8 at $70 1/2
COMS up $1 1/4 at $65 7/8     GNT up $1 1/4 at $39 1/2
GM down $3/4 at $61 1/8       ORCL unch. at $38 1/8
IOM down $1/8 at $18 7/8      OXHP up $1 1/2 at $53 1/4
KLAC up $13/16 at $40 5/8     PMSI down $1/4 at $11 3/8
LU up $2 3/8 $54 3/4          SLR up $1 at $61
MMM up $3 at $85              TDW up $5/8 at $48 3/4
T unch. at $38 7/8