ITT Corp. said yesterday that it had sold one of its consumer finance companies to Norwest Corp. and that it was close to selling three more financial services subsidiaries to an unidentified buyer.
The two deals are the latest in a blizzard of transactions intended to raise cash for ITT's entrance into the gambling and entertainment businesses.
Yesterday's announcement came only one day after ITT disclosed that it had agreed to sell its commercial finance unit to Deutsche Bank of Germany for a net gain for ITT that was estimated yesterday at about $900 million, not the $4 billion figure that was originally disclosed.
By the time all three deals are completed and two other financing businesses are sold, ITT said yesterday, the company should reap $3.3 billion to $3.5 billion.
But most of that money will very likely be spent financing a spate of recent acquisitions, including two sports teams, a cable network and a casino owner.
"I wouldn't describe it as a cash hoard," said Jay Cohen, an analyst at Salomon Bros. "I will say that the company does have some financial flexibility and is relatively liquid."
Wall Street was pleased with ITT's deals. Shares of ITT jumped $4.375 yesterday, to $88.125, on the New York Stock Exchange. Norwest's shares edged up 12.5 cents, to $23.
Norwest agreed to buy Island Finance, a consumer finance company serving Puerto Rico, several Caribbean islands and parts of Central America. Jim Gallagher, an ITT spokesman, said Norwest would pay $1.4 billion for Island Finance, which has more than $1 billion in outstanding loans.
But after some debt is retired by ITT, Norwest will end up spending around $600 million, a figure confirmed by Norwest.
The price was relatively steep, but analysts said Island Finance would immediately add 1 cent a share to Norwest's profits. The deal opens a new market for Norwest Financial, Norwest's highly successful consumer finance subsidiary, which operates in the United States and Canada.
ITT also said it was negotiating to sell its equipment finance, small business finance and real estate services units. The company declined to identify the potential buyer but said it had received a bid of $1.8 billion.
One of the most acquisitive conglomerates formed during the go-go years of the 1960s, ITT has substantial assets in insurance, manufacturing and hotels. In the last year the company has said it would like to reduce its dependence on the financial services assets and focus more on entertainment and gambling.
Last week, ITT announced that it would pay $1.7 billion to acquire Caesars World, which owns and operates casinos in Atlantic City, N.J.,; Las Vegas and Lake Tahoe, Nev.
Earlier this year, it joined forces with Cablevision Systems Corp. to acquire Madison Square Garden, the MSG cable television network and the New York Knicks and New York Rangers sports teams for $1.1 billion, a deal that is expected to be completed early next year.