Starwood Hotels appears poised to accept a takeover bid by a consortium led by China’s Anbang Insurance Group. The news comes after the consortium increased its offer from last week by more than $2 a share, to $78 a share in cash, bringing the total bid to $13.2 billion. The bid eclipses Marriott International’s cash-and-stock offer, which would pay Starwood the worth of its stock price—as of Thursday’s close, that offer price was $65.33 a share. Starwood gave Marriott a March 28th deadline to put in a counteroffer, potentially salvaging a deal that would create the world’s largest hotel operator.
In a statement, Starwood states that the bid by the consortium, which includes Anbang, J.C. Flowers & Co., and Primavera Capital Limited, was a “superior proposal.” It also notes that both bids would allow stockholders to separately receive consideration in the form of Interval Leisure Group common stock from the previously announced spin-off of its vacation ownership business, Vistana Signature Experiences, and subsequent merger with ILG, currently valued at approximately $5.67 per Starwood share.
In another statement, Marriott International notes that a combination of Marriott and Starwood is the best course for both companies. It is in the process of reviewing Anbang’s proposal, and is considering postponing its shareholders meeting, currently scheduled for March 28th, in order to consider alternatives. It has five days to negotiate after the March 28th deadline.
The consortium has confirmed it will remain outstanding until the expiration of Marriott’s negotiation period ends, at which point, if Starwood takes the consortium’s deal, it will need to pay Marriott $400 million.
