STAMFORD, CT — The price for Starwood Hotels just keeps rising, with the latest bid from China’s Anbang Insurance Group and its partners crossing the US$15 billion mark.
After accepting a counter-offer buyout agreement from Marriott International last week, Starwood announced today that its Board of Directors received a non-binding proposal from the Anbang Consortium on March 26, and will now have to determine if the sweetened offer is superior to Marriott’s revised bid.
Under the Consortium’s new proposal, the Consortium would acquire all of the outstanding shares of Starwood common stock for $81.00 per share in cash. Starwood’s Board has determined that this proposal is reasonably likely to lead to a ‘Superior Proposal,’ allowing Starwood to engage in discussions with the Consortium.
Starwood and the Consortium commenced discussions on March 26, and in those discussions, the Consortium made a revised proposal with an increased purchase price of $82.75 in cash per share of Starwood common stock. This represents an increase of $4.75 per share from the Consortium’s prior proposal on March 18. Starwood stockholders would receive additional consideration in the form of Interval Leisure Group common stock from its vacation ownership business, Vistana Signature Experiences, and subsequent merger with ILG, currently valued at $5.91 per Starwood share. On this basis, the Consortium proposal and the ILG transaction have a combined current value of $88.66 per share.
The two sides are working to finalize the other terms of the binding proposal. According to Starwood, “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.”
As previously announced, Starwood intends to convene its stockholder meeting to consider the merger with Marriott on March 28, and immediately adjourn the meeting until April 8. Starwood’s Board has not changed its recommendation in support of Starwood’s merger with Marriott.
