Starwood announced on Monday that an increased takeover offer of about $14 billion from the consortium led by Anbang constitutes a “Superior Proposal” as defined in Starwood’s merger agreement with Marriott.
Starwood said it’s in negotiations with the Anbang group after receiving a nonbinding offer of $82.75 a share in cash, according to a statement Monday. That compares with Marriott’s stock-and-cash offer valued at $75.91 a share, or about $12.8 billion, based on March 24th’s closing price. Marriott, in its own statement Monday, reaffirmed its commitment to buy Starwood, saying its proposal offers stockholders greater long-term value.
The new offer from Anbang, which is working with J.C. Flowers & Co. and Primavera Capital, shows the insurer won’t easily back down as it seeks to build its hotel holdings. The Beijing-based company last year purchased Manhattan’s landmark Waldorf Astoria for $1.95 billion, and is in a deal to acquire luxury-property owner Strategic Hotels & Resorts Inc. for about $6.5 billion. Gaining Starwood would add brands such as Sheraton, W and St. Regis, as well as about $4 billion worth of real estate.
Starwood, which has had a merger agreement with Marriott since November, on March 21 said it would proceed with an amended deal after receiving a sweetened bid from its larger competitor.
Marriott is offering 0.8 share and $21 in cash for each Starwood share. That deal, which would create the world’s biggest lodging company, is set for a shareholder vote on April 8. Marriott would be paid a $450 million termination fee if it falls apart.
An Anbang-led purchase of Starwood would mark the largest takeover of a U.S. company by a Chinese investor, surpassing the 2013 sale of Smithfield Foods for about $7 billion.
However, a person close to the China Insurance Regulatory Commission said the regulator had "clearly a disapproving attitude" toward Anbang's plan because completing the deal would break rules banning Chinese insurers from investing more than 15 percent of their assets abroad.
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