Chinese Firm Raises Bid for Starwood

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Just when we thought the tug-of-war was over between Marriott and the Anbang Consortium to buy Starwood, another counter offer from the Anbang Consortium has been made.

Starwood was looking for a buyer, and there were several interested parties. The leader of the pack was Marriott, and in November 2015 Marriott International and Starwood Hotels & Resorts Worldwide made an announcement about the potential merger between the two companies.

The acquisition price came out to be $340 million in cash, and $11.9 billion of Marriott International stock for a total of $12.2 billion.

Then Starwood received a new unsolicited bid from the Chinese-led investor group consortium including Anbang Insurance Group Ltd to the tune of $12.8 billion, and Starwood’s Board of Directors determined the new offer to “constitute a superior proposal” to the original one from Marriott.

Marriott made a counter offer of $13.6 billion and Starwood accepted.

Today, Starwood issued a press release that a revised proposal offer was received from Consortium consisting of Anbang Insurance Group, MC Flowers and Primavera Capital and it is “reasonably likely to lead to a superior proposal”.

When the bidding war first started, it looked like Starwood common stock was going to be acquired for around $70 per share.

With all the back and forth, the increased purchase price is now being proposed at $82.75 per share (which doesn’t include Vistana, Starwood’s timeshare business).

Starwood would still need to pay a $450 million breakup fee if they terminate their agreement with Marriott, and either way the increased bids mean more money for stockholders.

Marriott can still come back with a counter offer, and Starwood’s stockholder meeting is still set to be on April 8, 2016.

Will Marriott revise their bid and try again?

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