STAMFORD, CONN. — Starwood Hotels & Resorts Worldwide Inc. is considering terminating its planned acquisition by Marriott in light of a new offer from a Chinese-led joint venture.
Beijing-based Anbang Insurance Group is leading the new offer of $13.2 billion, which includes investment from J.C. Flowers & Co. and Primavera Capital Limited. The joint venture is collectively known as Anbang Consortium.
Starwood, which is based in Stamford, said that the Anbang bid is a superior proposal to the price tag that Marriott agreed to pay in November.
Marriott’s cash-and-stock proposal was valued at $68.06 per share, or $13.06 billion as of Thursday’s closing price, according to The Wall Street Journal.
Anbang Consortium would pay $78 per share, an increase from the $76 per share proposal it made on March 10. Click here to read the details on the initial Marriott offer.
Marriott has until March 28 to make a counter offer to Starwood, and has stated that it “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.”
Under the terms of the original merger agreement, Starwood, which owns the Westin, St. Regis, Sheraton and W hotel brands, must pay Marriott a termination fee of $400 million in cash if it decides to proceed with Anbang’s proposal.
The Starwood board could also block the Anbang proposal if it decides that Marriott’s is the “superior proposal” at the end of negotiations. The Anbang Consortium has confirmed that its offer will remain outstanding until the expiration of Marriott’s negotiation period.
Starwood is postponing its special meeting of stockholders, which was scheduled for March 28, until after a consultation with Marriott. Starwood’s board has not yet changed its recommendation in support of Starwood’s merger with Marriott.
Lazard and Citigroup are serving as financial advisors, and Cravath, Swaine & Moore LLP is providing legal counsel to Starwood.
Starwood’s stock price closed on March 17 at $76.39 per share, up from $69.35 per share on March 10.
For more on the hotel industry, click here to read the latest coverage of the 28th annual Hunter Hotel Conference.
— Christina Cannon