Marriott Tops Anbang Bid to Acquire Starwood, Raising Offer to $13.6B
STAMFORD, CONN. — Marriott International Inc. (NASDAQ: MAR) has increased its bid to acquire Starwood Hotels & Resorts Worldwide (NYSE: HOT) to $13.6 billion. Marriott had previously offered $12.2 billion to acquire the hospitality company, which owns the Westin, St. Regis, Sheraton and W hotel brands, before being outbid by Beijing-based Anbang Insurance Group at $13.2 billion.
The new Marriott offer values Starwood at $79.53 per share, topping Anbang’s offer of $78 per share. Marriott’s initial offer in November would’ve given shareholders 0.92 share of Marriott stock and $2 cash for each share of Starwood they own. The new offer will give shareholders less Marriott stock — 0.8 share — but considerably more cash at $21 per share, according to The New York Times.
Under the new agreement, the “break-up fee” — what Starwood will have to pay Marriott if it backs out of the deal — has been increased from $400 million to $450 million.
On a conference call this morning, Marriott CEO Arne Sorenson noted that Anbang could still make another offer to disrupt the deal, according to Hotel News Now. The Starwood and Marriott shareholders are both scheduled to vote April 8 on which proposal to accept.
“We are pleased that Marriott has recognized the value that Starwood brings to this merger and enhanced the consideration being paid to Starwood shareholders,” says Bruce Duncan, Starwood’s chairman of the board of directors. “We continue to be excited about the combination of Starwood and Marriott, which will create the world’s largest hotel company with an unparalleled platform for global growth in the upscale segment.”
Starwood shareholders would own about 34 percent of the combined company’s common stock after the merger is complete, based on current shares outstanding.
“This revised agreement offers superior value for Starwood’s shareholders, the ability to close quickly and provides value creation potential that will allow both sets of shareholders to benefit from improved financial performance,” according to a statement released by the two companies regarding the proposed merger. “Marriott and Starwood have already obtained important regulatory consents necessary to complete the transaction, including clearing pre-merger antitrust reviews in the United States and Canada.”
Lazard and Citigroup are serving as financial advisors to Starwood Hotels & Resorts Worldwide. Deutsche Bank Securities is the financial advisor to Marriott International. Cravath, Swaine & Moore is serving as legal counsel to Starwood Hotels & Resorts Worldwide, while Gibson, Dunn & Crutcher is serving as legal counsel to Marriott International on the transaction.
Marriott’s stock closed at $73.16 per share on Friday, March 18, down from $82.10 one year ago. Starwood’s stock closed at $80.57 per share on Friday, down from $81.11 one year ago.