Marriott wins over Starwood with higher bid of US$14.4b
Print Edition
MARRIOTT won over Starwood with a sweetened bid worth over US$14.4 billion just days after a Chinese insurance company appeared to take it away from the hotel chain with a more lucrative offer.
The buyout, which may still be contested by China’s Anbang, would create the world’s biggest hotel company and give Marriott a stable of tony properties run by Starwood, like the St Regis New York.
Starwood, which owns Sheraton, Westin and St Regis, over the weekend became the first US hotelier to gain access to Cuba, a day before the arrival of President Barack Obama. It is the first visit to Cuba by a sitting president in almost 90 years as relations between the two nations thaw.
The revised deal would give Starwood shareholders US$21 in cash and 0.8 shares of Marriott International Inc Class A stock for each Starwood share. Starwood shareholders are also expected to get Interval Leisure Group stock valued at US$5.83 per share. Taken together, that would value Starwood stock at US$85.36 per share, or about US$14.41 billion.
Marriott has more than 4,400 properties in 87 countries and regions, under brands such as Ritz-Carlton, Residence Inn and Marriott. Starwood has nearly 1,300 properties in about 100 countries.
Just days ago, Anbang put up an offer of US$83.83 for each Starwood share, or approximately US$14.15 billion. Starwood stockholders would have received US$78 in cash for each share they own plus US$5.67 in stock for a spinoff of a vacation business.
Anbang made a dramatic entry into the US two years ago when it bought the famed Waldorf Astoria of York for almost US$2 billion. Days before it contested Marriott for control of Starwood, it laid down US$6.5 billion to acquire Strategic Hotels & Resorts Inc, which owns several high-end properties including the JW Marriott Essex House in New York and Hotel Del Coronado in San Diego.
Marriott said yesterday that it is confident that it can achieve US$250 million in annual cost savings within two years of closing on the Starwood transaction. That’s US$50 million more than in estimated in November, when it gave its initial offer to Starwood.
Marriott and Starwood still anticipate the deal closing around mid-year. Anbang, or any other suitor, has until April 8 to top Marriott’s bid.
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