China’s Anbang Insurance Group Co. is ramping up a bidding war for Starwood Hotels & Resorts Worldwide Inc. by increasing its offer to US$14 billion.
It’s the latest challenge to US hotel operator’s merger with Marriott International Inc., Reuters reports.
The bidding war has pitted Marriott’s ambitions to create the world’s largest lodging company with about 5,700 hotels against Anbang’s drive to establish a vast portfolio of US real estate assets.
The acquisition of Starwood, owner of the Sheraton and Westin brands, by Anbang would be the largest ever by a Chinese company in the US.
Anbang’s consortium, which includes private equity firms J.C. Flowers & Co. and Primavera Capital Ltd, is offering US$82.75 per share in cash, in what is reasonably likely to lead to a proposal that is superior to the deal with Marriott, Starwood said.
Reuters earlier reported that Anbang had raised its offer.
Marriott’s latest cash-and-stock offer, which was announced on March 21, is worth around US$78 per share.
Starwood’s board has not yet changed its recommendation to its shareholders in support of the company’s merger with Marriott, Starwood said.
A vote for Starwood shareholders to approve the Marriott deal is scheduled for April 8.
“Marriott has the financial capacity and the wherewithal to push its bid up higher. However, so much of the transaction is based on Marriott’s current share price, I think investors would be less than thrilled if it increased its offer materially at this juncture,” said Bill Crow, an analyst at Raymond James.
Marriott declined to say if it would raise its offer further but said it is confident that the previously announced amended merger agreement with Starwood is the best course for both companies.
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