Wed, Mar 30, 2016 - Page 15 News List

Anbang raises Starwood offer to almost US$14bn

BIDDING WAR:Anbang pursued what would be the largest Chinese acquisition in the US by offering US$82.75 per share, after Marriott offered about US$78 a share

Reuters

A pedestrian walks past signage for the W Hotel Hollywood, owned by Starwood Hotels & Resorts Worldwide Inc, in Hollywood, California, on Monday last week.

Photo: Bloomberg

China’s Anbang Insurance Group Co (安邦保險集團) raised its offer for Starwood Hotels & Resorts Worldwide Inc to almost US$14 billion, Starwood said on Monday, in the latest challenge to the US hotel operator’s merger with Marriott International Inc.

The bidding war for Starwood has pitted Marriott’s ambitions to create the world’s largest lodging company with about 5,700 hotels against Anbang’s drive to create a vast portfolio of US real-estate assets.

The acquisition of Starwood, owner of the Sheraton and Westin brands, by Anbang would be the largest ever by a Chinese company in the US.

Anbang’s consortium, which includes private equity firms J.C. Flowers & Co and Primavera Capital Ltd (春華資本), has offered US$82.75 per share in cash, in what is reasonably likely to lead to a proposal that is superior to the deal with Marriott, Starwood said.

Marriott’s latest cash-and-stock offer, which was announced on Monday last week, is currently worth about US$78 per share. Starwood’s board has not yet changed its recommendation to its shareholders in support of the company’s merger with Marriott, Starwood said.

A vote for Starwood shareholders to approve the Marriott deal is scheduled for Friday next week.

Marriott on Monday declined to say if it would raise its offer. In a statement, Marriott said it was confident that the previously announced amended merger agreement with Starwood is the best course for both companies.

“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 said in its statement.

In any deal with Anbang or Marriott, Starwood shareholders would also receive stock in Interval Leisure Group Inc, which is getting Starwood’s vacation ownership business, currently worth US$5.91 per Starwood share.

Starwood shares rose 2.01 percent to US$83.78 on Monday. Marriott shares climbed 3.93 percent to US$71.34, as some investors hoped Anbang’s move would prompt Marriott to walk away from an expensive deal.

An acquisition of Starwood by Anbang would probably face scrutiny by the Committee on Foreign Investment in the US, an interagency panel that reviews deals to ensure they do not harm national security.

However, sources have said both Starwood and Anbang believe that deal would receive the committee’s clearance.

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