STAMFORD, Conn. — Could the battle for Starwood finally be coming to a close? After weeks of deliberation, counter-offers and revised bids from both Marriott International and a consortium led by Anbang Insurance Group, Starwood Hotels & Resorts has announced today that the consortium has withdrawn its US$15 billion buyout offer as a result of “market considerations.”
The China-based insurance company said that it won’t proceed any further, an abrupt announcement that sent shares of Starwood down 4% in late trading Thursday.
Starwood said its board continues to support its existing deal with Marriot, which initially offered $12.2 billion for Starwood in November. That has since grown to more than $14 billion. If the deal between Starwood and Marriott goes through, this will create the largest hospitality company in the world.
“Throughout this process, we have been focused on maximizing stockholder value now and in the future. Our Board is confident this transaction offers superior value for Starwood’s stockholders, can close quickly, and provides value-creation potential that will enable both sets of stockholders to benefit from future financial performance,” said Bruce Duncan, Chairman of Starwood’s Board. “We continue to be very excited about the combination of our two companies and are committed to completing this deal in an expeditious manner.”
Under the terms of the revised merger agreement, as announced on March 21, Starwood shareholders will receive $21.00 in cash and 0.80 shares of Marriott Class A common stock for each share of Starwood common stock. Excluding Starwood’s timeshare business, the transaction values Starwood at approximately $13.3 billion ($77.94 per share).
Starwood stockholders will separately receive consideration in the form of Interval Leisure Group (ILG) common stock from the spin-off of the Starwood timeshare business and subsequent merger with ILG, currently valued at $6.13 per Starwood share. The amended agreement and the ILG transaction have a combined current value of $84.07 per share of Starwood common stock.
The special meeting of Starwood stockholders to vote on and approve the Marriott-Starwood merger agreement will be held as scheduled on April 8 at 10:00 a.m. EST. The Starwood Board of Directors unanimously recommends that Starwood stockholders vote their shares ‘FOR’ the merger agreement with Marriott at the meeting.