Starwood Hotels & Resorts Worldwide Inc. wants Marriott International Inc. to make a counter-offer after saying it plans to accept a US$13.2 billion takeover bid by China’s Anbang Insurance Group Co.
The parent of Westin, Sheraton and W hotels has received a US$78 a share offer from the Chinese insurer and is planning to take it, Bloomberg reports.
The offer is US$2 a share more than the surprise bid the group made last week and eclipses Marriott’s cash-and-stock deal, which Starwood agreed to in November and is now worth US$69.31 a share, based on Marriott’s closing price of US$73.16.
Marriott has a March 28 deadline to renegotiate its agreement and salvage its plan to create the world’s biggest hotel operator.
A takeover by Anbang would extend a push into US hotels that started last year with its US$1.95 billion purchase of Manhattan’s Waldorf Astoria.
The sweetened bid underscores the intense interest in hotels from Chinese investors, who are seeking to buy hard assets abroad and capture demand from a surge in Chinese travelers.
Marriott, which avoids overpaying for assets, probably won’t engage in a protracted bidding war, according to analysts including Robert W. Baird & Co.’s David Loeb.
“While we expect Marriott to counter the consortium’s proposal, we believe Marriott will remain disciplined and it appears increasingly likely, in our opinion, that Starwood will be acquired by the consortium,” Loeb wrote in a research note Friday.
Starwood shares rose 5.5 percent to US$80.57, the highest closing price since July. Marriott climbed 1.9 percent.
John Paulson, the billionaire president of Paulson & Co., Starwood’s largest shareholder, said the firm is happy to see the increased offer, which better reflects the company’s value.
“Anbang is a proven, sophisticated buyer of related assets and we welcome their interest in Starwood,” Paulson said in an e-mailed statement.
His firm acquired about a 7 percent stake in Starwood last year, while the hotel operator was exploring strategic alternatives.
Anbang is joining forces with private equity firm J.C. Flowers & Co. and Chinese investment firm Primavera Capital on the bid.
Primavera was founded by Fred Hu, who previously ran China dealmaking for Goldman Sachs Group Inc.
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