Chi­nese firm’s of­fer com­pares with Mar­riott’s $12.8-bn takeover bid

The Financial Express - - FRONT PAGE -

Seat­tle, March 28: Star­wood Ho­tels & Re­sorts World­wide said it re­ceived a higher takeover of­fer from a group led by An­bang In­surance Group, putting the Chi­nese com­pany back into bat­tle with Mar­riott In­ter­na­tional for con­trol of the ho­tel op­er­a­tor.

Star­wood said the An­bang group of­fered $82.75 a share in cash, or about $14 bil­lion, ac­cord­ing to a state­ment on Mon­day. That com­pares with Mar­riott’s stock-and-cash of­fer val­ued at $75.91 a share, or about $12.8 bil­lion, based on Thurs­day’s clos­ing price.

Star­wood said it re­ceived a non-bind­ing bid of $81 a share on March 26 from the An­bang group, which in­creased its of­fer af­ter sub­se­quent dis­cus­sions. Star­wood is ne­go­ti­at­ing terms of a bind­ing pro­posal and said it will “care­fully con­sider the out­come of its dis­cus­sions with the con­sor­tium” in or­der to de­ter­mine the best course of ac­tion for share­hold­ers.

The new of­fer from An­bang, which is work­ing with JC Flow­ers and Pri­mav­era Cap­i­tal, shows the in­surer won’t eas­ily back down as it seeks to build its ho­tel hold­ings. The Bei­jing­based com­pany last year pur­chased Man­hat­tan’s land­mark Wal­dorf As­to­ria for $1.95 bil­lion, and is in a deal to ac­quire lux­ury-prop­erty owner Strate­gic Ho­tels & Re­sorts for about $6.5 bil­lion. Gain­ing Star­wood would add brands such as Sher­a­ton, W and St Regis, as well as about $4 bil­lion worth of real estate.

Star­wood, which has had a merger agree­ment with Mar­riott since Novem­ber, on March 21 said it would pro­ceed with an amended deal af­ter re­ceiv­ing a sweet­ened bid­from its larger com­peti­tor. A 6.2% de­cline in Mar­riott’s stock in the four days through Thurs­day pushed the value of its lat­est of­fer be­low the An­bang group’s pre­vi­ous cash bid of $78 a share.

Rep­re­sen­ta­tives for Mar­riott and An­bang didn’t im­me­di­ately re­turn calls seek­ing com­ment on the new of­fer.

Mar­riott is of­fer­ing 0.8 share and $21 in cash for each Star­wood share. That deal, which would cre­ate the world’s big­gest lodg­ing com­pany, is set for a share­holder vote on April 8. Mar­riott would be paid a $450 mil­lion ter­mi­na­tion fee if it falls apart.

The An­bang group is be­ing ad­vised by PJT Part­ners, Star­wood is be­ing ad­vised by Lazard and Cit­i­group Mar­riott is work­ing with Deutsche Bank Se­cu­ri­ties.

An An­bang-led pur­chase of Star­wood would mark the largest takeover of a US com­pany by a Chi­nese in­vestor, sur­pass­ing the 2013 sale of Smith­field Foods for about $7 bil­lion.

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