ALLEGIS <AEG> FILING MAY BE LATER THIS WEEK
Allegis Corp may file its plan of
recapitalization with the Securities and Exchange Commission
later this week, a company spokesman said.
    The spokesman also said the company has no comment on
Coniston Partners plan to carry out its solicitation of
consents from shareholders to remove Allegis directors.
    Coniston proposes replacing the board of directors with its
own candidates and then selling off one or more units of
Allegis. Allegis, apparently in response to takeover activity,
announced a sweeping recapitalization plan, which will give
shareholders 60 dlrs per share.
    Allegis shares came under pressure from institutional
selling today. The stock slipped 1-3/8 to 85-1/8 on volume of
more than 1.6 mln shares. Traders said there was also
arbitrage-related buying.
    PaineWebber Group analyst Edward Starkman said institutions
and other long-term holders may want to cash in their gains
instead of waiting for the company's special dividend, which
would be taxed at a higher rate. The recapitalization is
subject to shareholder and other approvals.
    Starkman said he believes Coniston may still have a chance
to win the battle for control of Allegis' board room, despite
the recapitalization plan.
    Coniston Partners would not comment on the recapitalization
plan.
    "We said a week ago, and we say it again today that the way
to maximize value for shareholders is to see these companies
traded as independent companies," said Keith Gollust, one of
the partners.
    Allegis owns United Air Lines, Hertz rental cars, and
Westin and Hilton International hotels.
    Allegis' recapitalization plan does not entail the sale of
any of those businesses, which its management claims are
necessary to its travel services strategy. The recapitalization
plan would add three billion dlrs in debt to its balance sheet.
    Some Wall Street analysts believe such a move could be
risky since the airline, as well as other travel businesses,
are dependant on the strength of the economy.
    "They've become sort of a super cyclical company," Starkman
said. The hotels and car rental business represents "no
diversification. It just makes it worse."
    Traders and analysts who believe Coniston's effort may have
a chance believe that Allegis management is not giving
shareholders full value. After receiving the dividend,
shareholders will still hold their stock. Arbitragers and
analysts valued the recapitalization in the upper 80s to 100
dlrs per share.
    Breakup values for the company estimated on Wall Street
exceed 110 dlrs per share.

 Reuter
