Starwood Postpones Vote on Marriott Offer Set for Today After Receiving Substantially Higher Offer from Chinese-led Consortium
In the ongoing bidding war for Starwood Hotels & Resorts Worldwide Inc., a consortium of investors led by China’s Anbang Insurance Group Co. has substantially raised the stakes with a new $14 billion offer that may make it difficult for Marriott International, Inc. (NASDAQ: MAR
) to stay in the game.
The consortium’s latest offer submitted over the Easter weekend is $82.75 per share, a significant increase over Marriott’s last bid of $76 per share. After consulting with its legal and financial advisors, Starwood Hotels’ board determined the revised, non-binding proposal from a consortium that also includes, J.C. Flowers & Co. and Primavera Capital Ltd., qualified as reasonably likely to lead to a “superior proposal,” allowing Starwood to engage with Anbang to review the higher offer under the terms of its agreement with Marriott.
Starwood said it is working with the consortium to discuss non-price terms related to the revised proposal and finalize other terms of a binding proposal from the consortium.
Marriott said it will monitor this development and continues to expect each company's stockholders will vote on Marriott’s proposal on April 8, 2016. Marriott also raised questions on the ability of Anbang to secure government approvals for its higher 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 officials said in a prepared statement, referring to Chinese regulatory approvals.
According to reports last week, China's insurance regulator could reject a bid by Anbang Insurance Group to buy Starwood since it would put the insurer's offshore assets above a threshold for overseas investments.
Marriott said they it would have no additional comment until further developments occur.
Starwood, which had intended to convene a stockholder meeting today to consider the merger with Marriott, has postponed it to April 8, 2016, as it considers the new offer from Anbang. Starwood’s board has not yet changed its recommendation in support of Starwood’s merger with Marriott.
Starwood Hotels controls nearly 1,300 properties in approximately 100 countries under the renowned brands: St. Regis, The Luxury Collection, W, Design Hotels, Westin, Le Méridien, Sheraton, Four Points by Sheraton, Aloft, Element, and the recently introduced Tribute Portfolio.
Lazard and Citigroup are serving as financial advisors and Cravath, Swaine & Moore LLP is serving as legal counsel to Starwood.