Anbang offer threatens Marriott’s Starwood deal


The Sheraton Macau Hotel, Cotai Central, part of Starwood’s portfolio

A COHORT led by China’s Anbang Insurance Group has made an estimated US$13 billion offer for Starwood Hotels & Resorts Worldwide, in an attempt to upset the pending US$12.2 billion offer made by Marriott International in November last year.

Anbang’s partners include Primavera Capital Group and J.C. Flowers & Co.

Anbang’s unsolicited rival bid values Starwood’s shares at US$76 each, an amount carrying a 7.9 per cent premium over Marriott’s offer – consisting of US$11.9 billion in Marriott stock and US$340 million in cash – that was worth US$63.74 per share as of Friday’s closing.

Starwood will be obligated to give Marriott US$400 million in termination fees if they were to retract from the deal, a small price to pay for the substantially bigger offer at hand.

Still, Marriott stated in a statement released yesterday that they are committed to the original proposal, belaying fears of a bidding war. Shareholders of Starwood and Marriott are scheduled to vote on the deal on March 28, less than two weeks from now.

This is not the first time Beijing-based Anbang is making large-scale foreign investments. They had just agreed to a US$6.5 billion purchase of US-based hotel owner Strategic Hotels & Resorts from Blackstone Group.

They also purchased the Waldorf Astoria in Manhattan, New York, for almost US$2 billion less than two years ago.

Sponsored Post