Jockeying for Starwood Hotels & Resorts Worldwide continues.
A group of investors, led by Chinese insurer Anbang, has raised its offer to buy the hotel chain operator to about $ 13.9 billion – or $ 82.75 per share in cash – trumping a competing bid from Marriott International.
The revised, non-binding offer from Anbang "is reasonably likely to lead to a 'superior proposal'” than the one pitched by Marriott, Starwood said in a statement Monday.
Shares of Starwood, whose brands include Westin, Sheraton and W Hotels, jumped 2.5% Monday to $ 84.21.
Marriott rose 4.1% to $ 71.48.
In November, Marriott, based in Bethesda, Md., agreed to acquire Starwood for $ 12.2 billion — $ 2 in cash and 0.92 of its own shares for each Starwood share — to create the world's largest hotel company.
Starwood dropped Marriott's bid on March 18 to opt for a $ 13 billion all-cash offer from Anbang, valued at about $ 78 per Starwood share. Determined to complete the acquisition, Marriott then raised its bid to about $ 79.53 per share — $ 21.00 in cash and 0.80 shares of Marriott Class A common stock for each Starwood share.
Starwood owes Marriott $ 400 million in cash if it backs out of its agreement with Marriott.
Anbang's comeback with a better offer was widely expected. It arrived Saturday with an offer of $ 81 per share in cash, prompting further negotiation through the weekend that resulted in the heightened offer, Starwood said. Anbang’s consortium includes investment firms J.C. Flowers & Co. and Primavera Capital.
“The Starwood board, in consultation with its legal and financial advisors, will carefully consider the outcome of its discussions with the consortium in order to determine the course of action that is in the best interest of Starwood and its stockholders,” Starwood said. “Starwood and the consortium are continuing to discuss non-price terms related to the consortium's revised proposal, and are working to finalize the other terms of a binding proposal.”
Starwood plans to hold a stockholder meeting Monday to consider its deal with Marriott, “and immediately adjourn the meeting until April 8,” Starwood said.
“Starwood's board has not changed its recommendation in support of Starwood's merger with Marriott,” Starwood said.
In a statement, Marriott said Monday it was committed to completing its deal but it didn’t raise its current offer. “Starwood stockholders should give serious consideration to the question of whether the Anbang-led consortium will be able to close the proposed transaction, with a particular focus on the certainty of the consortium's financing and the timing of any required regulatory approvals,” Marriott said.
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