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Hilton Completes Spinoff and Acquisition

Park Place Entertainment concurrently acquired the three Mississippi gaming operations of Grand Casinos Inc. (NYSE:GND), making it the world's largest casino gaming company. Through the merger, Park Place has assumed approximately $565 million of debt and issued shares of Park Place to Grand shareholders in a ratio of one share of Park Place for each share of Grand.

Hilton shareholders of record at the close of business on Dec. 23, 1998 will receive one share of Park Place common stock for each share of Hilton common stock they own. An estimated 260.8 million shares of Park Place will be distributed to Hilton shareholders to effectuate the spinoff, and an additional 42.3 million shares of Park Place will be issued to Grand shareholders to effectuate the merger.

The transactions were approved in November by shareholders of both Hilton and Grand Casinos. Approvals have also been received from casino gaming regulators in Nevada, New Jersey, Mississippi, Louisiana, Australia and Uruguay.

Hilton Hotels owns, manages or franchises approximately 250 hotels in the United States, Canada and Mexico, including renowned properties such as the Waldorf-Astoria, Hilton San Francisco and Towers, Hilton Hawaiian Village and Chicago's Palmer House Hilton. The company will continue to pursue a growth strategy centered on acquiring full-service hotels in markets seeing little new supply. In 1998, the company purchased approximately $950 million of hotels. It will continue aggressively building its franchise program in the United States, Canada and Mexico, which will include its successful Hilton Garden Inn program, which is expected to have 200 hotels open or under contract by 2000.

Park Place Entertainment is the world's largest gaming company, as measured by casino square footage and revenues, and has a leading presence in Nevada, New Jersey and Mississippi—the three largest gaming markets in the United States. In 1999, the company expects to own or have an interest in 18 gaming properties located throughout the United States and in Australia and Uruguay, with a total of 1.4 million square feet of casino space and more than 23,000 hotel rooms.

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