Marriott’s Takeover Bid of Starwood Topped by Chinese-Led Consortium

0
32
Marriott hotel exterior view in Cleveland
.

A battle for control of the Starwood hotel chain, which owns Sheraton and St. Regis hotels, is under way between Marriott and a consortium led by China’s Anbang Insurance Group after the latter topped the former’s buyout offer on Monday.

Anbang has been on a buying spree as of late, and is quickly becoming a major competitor in the U.S. hotel and hospitality industry after it bought its way into Strategic Hotels & Resorts Inc. just last week for $6.5 billion.

Strategic Hotels and Resorts Inc. owns the Westin St. Francis in San Francisco, the Four Seasons in Washington, D.C., and the Ritz-Carlton in California.

In 2014, Anbang also bought New York’s Waldorf Astoria for close to $2 billion.

Now the Chinese company is going head-to-head with American hotel giant Marriott International Inc. for control of Starwood.

Marriott, in November last year, offered to buy Starwood at $72.08 per share in stock and cash, which pegs Starwood’s value at $12.18 billion at the time the deal was proposed. Marriott shares have since dropped 6.5% reducing the overall value of the deal to $11 billion.

On Monday, Anbang tendered a significantly higher offer of $76 per share in cash, which makes the deal worth $12.84 billion.

Starwood Hotels & Resorts Worldwide Inc., which owns close to 1,300 properties in a hundred countries worldwide, said Monday that it still prefers the Marriott deal, but it was also looking at the offer of Anbang.

Marriott, on Monday, refused to be dragged into a bidding war, saying it stands firm on its offer.

Shareholders of both Marriott and Starwood will be voting on Marriott’s offer on March 28.

Starwood shares surged more than 7% in pre-trade on Monday following the news of Anbang’s offer.

LEAVE A REPLY

Please enter your comment!
Please enter your name here