The bidding war for Starwood Hotels & Resorts just got hotter, with a consortium led by China’s Anbang Insurance Group raising its unsolicited offer to $14 billion, potentially derailing Marriott’s pending deal for the U.S. hotelier.
The Stamford, Conn.-based company on Monday said that consortium’s revised offer to buy the company for $82.75 per share in cash is “reasonably likely to lead to a ‘superior proposal’ as defined in Starwood’s merger agreement with Marriott.” The consortium also includes private equity firms J.C. Flowers & Co and Primavera Capital.
The latest offer is an increase of $4.75 per share from the consortium’s prior binding proposal on March 18, Starwood said. After that bid, Marriott on March 21 raised the terms of its initial November deal for Starwood, now worth around $78 per share, according to Reuters.
“Starwood and the consortium are continuing to discuss non-price terms related to the consortium’s revised proposal, and are working to finalize the other terms of a binding proposal from the consortium, including definitive documentation,” the company said in a press release. “There can be no assurance that discussions will result in a binding proposal from the consortium, that the Starwood board will determine that any such proposal is a ‘superior proposal’ or that a transaction with the consortium will be approved or consummated on any particular terms or at all.”
Starwood was still expected to convene its stockholder meeting on Monday to consider the merger with Marriott, and then immediately adjourn the meeting until April 8. The company said its board had not changed its recommendation in support of Starwood’s merger with Marriott.
Under its latest merger agreement with Marriott, Starwood would pay a breakup fee to Marriott of $450 million.
Marriott on Monday reaffirmed its commitment to acquire Starwood, stating that its board was confident that the amended merger agreement was “the best course for both companies.”
“Starwood stockholders should give serious consideration to the question of whether the Anbang-led consortium will be able to close the proposed transaction, with a particular focus on the certainty of the consortium’s financing and the timing of any required regulatory approvals,” Marriott said in a press release.
All of the offers by both bidders include Starwood’s vacation ownership business, currently worth $5.91 per Starwood share.