David Michels, Chief executive of Hilton Group, prefers to err on the side of caution. He said recently that the chances of a marriage between his companyís hotel arm, Hilton International, and its American partner, Hilton Hotels Corporation (HHC), was fifty-fifty.
In his spare time Michels is a fine poker player and even he privately recognises the cards are now generously stacked in favour of the tie-up. The merger will reunite the Hilton brand globally for the first time since 1964. The big issues such as tax and pensions have been resolved and an announcement is only a few weeks away.
What has taken time is dealing with the sheer scale of Hiltonís international operations and sifting through the innumerable franchise and managed-hotel contracts in some 70 countries.
The idea that an interloper will try to gatecrash the party is off-beam. The two groups already achieve huge economies of scale in marketing and distribution as well as loyalty programmes. To disentangle these would be hugely expensive and counter-productive.
Shares in HHC have risen 5% in recent weeks to $23 as investors wake up to the potential growth opportunities. Under the terms of the current alliance between the two hoteliers, HHC is unable to expand outside America. When the takeover is completed, HHC can start an international roll-out of brands that have been landlocked within 50 states in America. These include Embassy Suites, Conrad Hotels, Doubletree and Hampton Inns.
But what of Ladbrokes, Hilton Groupís other very profitable operation? The plan is for Hilton investors to receive cash for the hotel assets and shares in a stand-alone Ladbrokes betting business. And it will be of no surprise if this company is eventually taken over, but at a high multiple.
Most of the existing Hilton board will fold into the new Ladbrokes company. The intention is for Sir Ian Robertson, Hiltonís chairman, to head the group but he may decide not to make this a long stint.
Michels will leave, as will his deputy and finance director, Brian Wallace. At least two non-executives at Hilton Group will also stand down. One is Stephen Bollenbach, who is chief executive at HHC.