Paulson takes 7pc Starwood stake to become top shareholder
WASHINGTON: John Paulson's hedge funds last quarter acquired a 7 percent stake in Starwood Hotels & Resorts Worldwide Inc., becoming the biggest shareholder in the company as it explores strategic alternatives. Paulson & Co., the New York-based money-management firm run by the billionaire, held about 12 million Starwood shares as of June 30, valued at $973 million, according to a Form 13F filed with the U.S. Securities and Exchange Commission. Paulson didn't report holding any Starwood shares in the prior quarter.
Paulson is known for taking stakes in companies that are likely to be involved in takeovers. Starwood, the Stamford, Connecticut-based owner of brands including the W, Sheraton and St. Regis, announced on April 29 that it had hired Lazard Ltd. to evaluate options, setting the stage for a potential sale. "The kind of investor that is moving into these shares today is one who sees a long-term value in the company and the possibility of a near-term larger strategic move," said David Loeb, an analyst with Robert W. Baird & Co.
Paulson's holding made it the top Starwood shareholder as of June 30, according to data compiled by Bloomberg. Starwood shares gained 8.3 percent on the day it announced the Lazard hiring, to $87.53. They have since retreated, closing Friday at $75.39. The company, led by interim Chief Executive Officer Adam Aron after the resignation of longtime head Frits van Paasschen in February, has been lagging behind competitors such as Marriott International Inc. and Hilton Worldwide Holdings Inc. in expanding the number of hotels carrying its brands.