After receiving an increased takeover bid of about $13.2 billion from an investment group led by China's Anbang Insurance Group, Starwood Hotels & Resorts Worldwide Inc. today determined the new offer constitutes a “superior proposal” to its current merger agreement with Marriott International Inc. Under the terms of its agreement, Marriott has the right to counter-offer the higher bid until March 28.
Starwood said it has determined the revised unsolicited offer from the Anbang consortium is "binding and fully financed." In addition to Anbang Insurance Group Co. Ltd., the rival investment group includes J.C. Flowers & Co. and Primavera Capital Ltd. The new bid is $2 higher per share than groups's initial offer earlier this week.
Last November, Starwood and Marriott International agreed to merge in a $12.2 billion deal that would create the world's largest hotel chain with 5,500 hotels with 1.1 million rooms across 30 brands.
Starwood notified Marriott this morning of the binding proposal from Anbang and that it intends to terminate the Marriott merger agreement and enter into negotiations with the consortium.
"Marriott continues to believe that a combination of Marriott and Starwood is the best course for both companies and offers the best value to Starwood shareholders," Marriott said in a prepared statement this morning, adding that it is in the process of reviewing the Anbang consortium's proposal and considering its alternatives.
Starwood has postponed its March 28 stockholder meeting to vote on the Marriott merger. Marriott is considering doing the same for its scheduled vote.
Starwood is one of the leading hotel and leisure companies in the world with nearly 1,300 properties in approximately 100 countries. It owns and operates several major hotel brands, including St. Regis, The Luxury Collection, W, Design Hotels, Westin, Le Méridien, Sheraton, Four Points by Sheraton, Aloft, Element and the recently introduced Tribute Portfolio.