Closing the Gap

At Omaha's red brick Fontenelle Hotel last week, the nation's No. 2 hotel chain concluded the second biggest deal in U.S. hotel history. Using a dime-store pen, Sheraton Corp.'s President Ernest Henderson and Vice President Robert L. Moore signed an agreement to buy the 22-hotel Eppley chain, largest and oldest personally owned hotel group in the U.S. Its 22 properties in six states range from Pittsburgh's 1,500-room William Penn to the 123-room Tallcorn in Marshalltown, Iowa. Price: $30 million. (In the biggest deal, Conrad Hilton paid $78 million for the Statler chain in 1954.)

Last week's deal was eight years in the making. Bachelor Eugene C. Eppley, 72, a big stockholder in both Hilton and Sheraton chains, had long been anxious to retire. Sheraton's purchase, said Henderson, will "substantially narrow the gap" between his chain and Hilton's. With new hotels abuilding in Philadelphia and Dallas, the Sheraton empire now boasts 54 hotels, 25 more than the Hilton chain, although Hilton has 1,700 more rooms and grosses some $40 million more a year. All the Eppley hotels are in new territory for Sheraton, and all but three were sold outright. The others, Omaha's Fontenelle and Rome, Cedar Rapids' (Iowa) Montrose, will be leased by Sheraton.

Despite his new buy, Henderson will have a hard time catching Connie Hilton. Last week in Cincinnati, for a total of $25 million, Hilton bought the eight-year-old Terrace Plaza and took a 25-year lease on the 29-story Netherland Plaza. Hilton, who plans to build an $18 million Kansas City hotel, announced last week that he will also build a $24 million Detroit hotel with 1,500 rooms and 50 penthouses, operate it for a fee on a 25-year lease for an investment group. Hilton says he has already cleared his plans with the U.S. Justice Department, whose trustbusters (TIME, Feb. 20) forced the chain to sell Washington's Mayflower, St. Louis' Jefferson and New York's Roosevelt hotels. Within a year, Hilton will open other new hotels in Mexico City, Acapulco, Havana, Cairo and Montreal.

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