Starwood Gets Sweetened Bid From Chinese Buyers

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The Chinese consortium led by Anbang Insurance Group has raised its bid for Starwood Hotels and Resorts Worldwide Inc. (NYSE: HOT) to $82.75 per share in a non-binding, all-cash offer that appears to be superior to last week’s offer of roughly $79.53 in cash and stock from Marriott International Inc. (NASDAQ: MAR).

The offer was made on Saturday, March 26, at $81 per share, and Starwood’s board determined that the offer was likely to lead to a legally defined superior proposal so it began discussions with the Anbang-led group. The result of those discussions was an increase in the buyout offer to $82.75.

Including approximately $5.91 per Starwood share related to a spin-off of the company’s timeshare business into a merger with Interval Leisure Group Inc. (NASDAQ: IILG), the total value of the offer rises to $88.66. Including the spin-off, the Marriott offer is valued at about $82.75 per share in cash and stock. The additional consideration would be paid in common stock of Interval Leisure Group.

In a separate news release, Marriott said:

Starwood stated today that its Board of Directors has not changed its recommendation in support of Starwood’s merger with Marriott. ¬†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.

If the Anbang-led group prevails, Starwood has previously agreed to pay a break-up fee of $450 million in certain circumstances and also to reimburse Marriott for up to $18 million in actual costs related to the financing of the transaction.

Starwood’s stock traded up about 2.2% Monday afternoon, at $83.93 in a 52-week range of $56.87 to $87.99.

Marriott’s stock traded up 3.8%, at $71.25 in a 52-week range of $56.43 to $84.33.