Hilton Hotels' Two Track Governance

Hilton Hotels Corp. (HLT) is in the process of being absorbed by The Blackstone Group (BX). The transaction is scheduled to close sometime in the fourth quarter of 2007. The deal is not subject to financing. The legal machine is probably chugging away to close the deal. Lots of paper work, of course. Hilton has recommended, of course.

Hilton has decided to cancel its upcoming conference call. The assumption must be why bother with a done deal. The last conference call had technical glitches which were not Hilton's fault, but were very annoying.

The governance issue is this: Until the deal actually closes, there is an obligation to keep any and all investors fully informed. Blackstone is public, so when an asset is sold from one investor set to another, the need for Fair and Full Disclosure does not disappear. So why not have the conference call and put it out there? No one will get hurt.

Or does Blackstone want the cone of silence to come down and keep certain matters under wraps? What matters? When you keep things in the closet, it only creates doubt and skepticism.

Hilton and Blackstone investors are not being well served. Blackstone still trades below issue price. Blackstone needs to learn a few lessons about investor communications. Its not only what you say - its what you do not say that speaks more loudly.