U.S. hotel operator Starwood Hotels & Resorts Worldwide Inc received a bigger buyout offer in the consortium led by China’s Anbang Insurance Group that may derail Marriott International Inc’s planned takeover of Starwood.
Marriott stated it remained centered on the sale, that might make the world’s largest hotel chain with top brands including Sheraton, Ritz Carlton and also the Autograph Collection.
Starwood’s shares rose 7.5 percent noisy . trading on Monday. Marriott, which developed a US$12.18 billion offer in November, was up 3 %.
A cope with the Anbang-led group, whose offer values Starwood at US$12.84 billion, may not be easy given increased U.S. scrutiny of Chinese-initiated M&As over security concerns.
Chinese insurance providers are flush with cash and searching to diversify their portfolios prior to the country’s aging population starts claiming by themselves policies. U.S. assets will also be an excellent hedge against any future weakness inside the yuan.
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Anbang, online learning resources New York’s Waldorf Astoria, is developing a big push to the U.S. hotel industry. It is also decided to buy Strategic Hotels & Resorts Inc from Blackstone Group LP for about US$6.5 billion, a resource told Reuters.
“Anbang’s non-binding offer places Starwood shareholders within the difficult position of selecting between Marriott’s bird-in-a-hand firm commitment and Anbang’s two-in-the-bush offer,” Nomura Securities analyst Harry Curtis wrote in the note to clients.
Marriott may slightly enhance the terms of its offer and emerge because the winning bidder, Curtis said.
The US$76 per share offer with the Anbang-led consortium, including private equity finance investors J.C. Flowers & Co and Primavera Capital Group, tops Marriott’s offer of US$72.08 per share.
Marriott’s offers are now worth about US$11 billion as Marriott shares have dropped 6.5 % since it made the sale.
Starwood stated it received a waiver from Marriott that allows it to take part in discussions while using consortium. The waiver will expire at 11:59 p.m. ET (0359 GMT) on March 17.
Anbang’s offer excludes the amount shareholders can get contained in the previously announced sale of Starwood’s vacation ownership business, currently worth about US$5.50 per Starwood share.
Interval Leisure Group said in October it could buy Starwood’s vacation ownership business, Vistana Signature Experiences, then worth about US$1.5 billion.
Marriott’s offer of US$72.08 per share also excluded the holiday ownership business.
Lazard and Citigroup Global Markets Inc are financial advisers to Starwood. Cravath, Swaine & Moore LLP is really a lawyer.
? Thomson Reuters 2016
