Chinese-led group hikes offer for Starwood
Print Edition
US hotel operator Starwood Hotels & Resorts Worldwide Inc received a higher buyout offer from a consortium led by China’s Anbang Insurance Group that could derail Marriott International Inc’s planned takeover of Starwood.
Marriott, which made a US$12.18 billion offer in November, said it remained committed to the deal, which would create the world’s largest hotel chain with top brands including Sheraton, Ritz Carlton and the Autograph Collection.
A deal with the Anbang-led group, whose offer values Starwood at US$12.84 billion, may not be easy given increased US scrutiny of Chinese-initiated M&As over security concerns.
Chinese insurance companies are flush with cash and looking to diversify their portfolios before the country’s aging population starts claiming on their policies. US assets are also a good hedge against any future weakness in the yuan.
Anbang, the owner of New York’s Waldorf Astoria, is making a big push into the US hotel industry. It has also agreed to buy Strategic Hotels & Resorts Inc from Blackstone Group LP for around US$6.5 billion, a source said.
“Anbang’s non-binding offer places Starwood shareholders in the difficult position of choosing between Marriott’s bird-in-a-hand firm commitment and Anbang’s two-in-the-bush offer,” Nomura Securities analyst Harry Curtis wrote in a note to clients.
Marriott may slightly improve the terms of its offer and emerge as the winning bidder, Curtis said.
The US$76 per share offer by the Anbang-led consortium, which also includes private equity firms JC Flowers & Co and Primavera Capital, tops Marriott’s offer of US$72.08 per share.
Marriott’s offer is now worth about US$11 billion as Marriott shares have dropped 6.5 percent since it made the offer.
Starwood said it received a waiver from Marriott that allows it to engage in discussions with the consortium. The waiver will expire on Thursday.
Anbang’s offer excludes the amount shareholders will receive as part of the previously announced sale of Starwood’s vacation ownership business, currently worth about US$5.50 per Starwood share.
Interval Leisure Group said in October that it would buy Starwood’s vacation ownership business, Vistana Signature Experiences, then valued at US$1.5 billion.
Marriott’s offer of US$72.08 per share also excluded the vacation ownership business.
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