Starwood Hotels & Resorts said Friday that a group led by China-based Anbang Insurance Group raised its buyout bid for the hotel company to $13.2 billion, and that it will accept the offer and terminate Marriott International's buyout agreement.
The Anbang group, which also includes J.C. Flowers & Co. and Primavera Capital Ltd., raised its all-cash offer to $78 a share from the bid of $76 per share submitted on March 10.
Starwood is giving Marriott until March 28 to submit a counteroffer.
In a statement on Friday, Marriott said, "Marriott continues to believe that a combination of Marriott and Starwood is the best course for both companies and offers the best value to Starwood shareholders. Marriott is in the process of reviewing the Anbang consortium's proposal and is carefully considering its alternatives."
Starwood agreed to be acquired by Marriott in November. While the value of that buyout was estimated at about $12.2 billion at the time ($70.08 per Starwood share in Marriott stock and $2 per Starwood share in cash), Starwood said Friday that the value of Marriott’s proposed buyout has fallen to $65.33 per Starwood share, or about $11 billion, because Marriott’s stock price has fallen in the past five months.
Starwood, whose brands include W, St. Regis and Sheraton, is subject to a $400 million termination fee for ending the Marriott agreement. Factoring that in, Anbang’s all-cash offer is still worth about $1.8 billion more than Marriott’s predominantly stock-based offer.
With a Starwood acquisition, Marriott would have become by far the world’s largest hotel company, overseeing about 5,700 hotels across 30 brands.
Starwood shares as of 9:20 a.m. Eastern time were up more than 5% from Thursday to more than $80 a share in pre-market trading.
