Starwood accepts a higher bid over Marriott’s recent offer.
Five months after Marriott first made its move to acquire Starwood Hotels and Resorts, Starwood decided today to go with a different group of investors who made a last-minute offer.
Calling it a “superior proposal,” Starwood announced that it would go with China-based Anbang Insurance, U.S. private equity firm J.C. Flowers & Co., and China-based investors Primavera Capital Limited. The late-breaking deal offered $78 per share, which equates to about $13.2 billion—$370 million more than Marriott’s most recent offer, according to Bloomberg.
Marriott will have until March 28 to counter with a better bid before the sale is finalized, but if it is, Starwood would have to pay Marriott $400 million to end their deal. “Starwood will negotiate in good faith with Marriott during this period, and the Starwood board will consider in good faith any changes to the Marriott agreement that Marriott may propose," Starwood said in a statement.
Marriott’s announcement of the acquisition last fall turned heads worldwide, with travelers wondering how the massive merger would affect their SPG loyalty points, which has some of the highest redemption rates around. Marriott since has cleared regulatory hurdles and was working toward a June closing date, so the bid from Anbang—which owns New York’s Waldorf Astoria and made waves when it bought several Four Seasons, Fairmont, and Intercontinental hotels from The Blackrock Group days before making a play for Starwood—certainly throws a wrench in the deal.
T+L already reported that if Marriott is successful with the purchase, it stands to become the largest hotel company in the world—with the largest luxury hotel portfolio—by acquiring brands like W Hotels, St. Regis, Westin, and Aloft, and adding them to its existing 19 brands that includes Ritz-Carlton, Edition, and Autograph.
After today’s news, Marriott International Inc. wrote in its own statement that it “continues to believe that a combination of Marriott and Starwood is the best course for both companies,” and that it is “carefully considering its alternatives.” Stay tuned: we’ll be eager to see if the company counters, or walks away with that $400 million.