The proposed merger between Starwood and Marriott International has taken a dramatic turn with a last-minute offer by Chinese insurance giant Anbang.
Anbang Insurance Group has offered to acquire all outstanding shares of Starwood Hotels & Resorts for US$76 per share in cash, or US$12.8 billion, according to reports.
The bid could threaten Marriott International’s acquisition of Starwood, which was first announced last November (see here).
According to the original agreement, Starwood is allowed to negotiate with other potential bidders until March 17.
One advantage of the new offer is that it would be paid wholly in cash, whereas Marriott’s is a stock and cash option. The valuation offered by Anbang – $76 per share – is significantly more than the approximate $63.74 per share expected under the Marriott deal.
Starwood has stated it has entered into discussions with the Chinese insurance group, but is still committed of the original agreement with Marriott. Starwood said in a statement that its “board of directors has not changed its recommendation in support of Starwood’s merger with Marriott”.
“The board, in consultation with its legal and financial advisors, will carefully consider the outcome of its discussions with the consortium in order to determine the course of action that is in the best interest of Starwood and its stockholders,” the statement added.
The Wall Street Journal reports that Chinese investors are seeking more stability in US real estate amid jitters in China and Asia stock markets.