Marriott International has won over Starwood Hotels & Resorts with a newly bumped-up bid worth $13.6 billion, after its initial bid was topped by a consortium led by the Chinese Anbang Insurance Group with multiple offers earlier this month reaching $13.16 billion.
“We are pleased that Marriot has recognized the value that Starwood brings to this merger and enhanced the consideration being paid to Starwood shareholders,” said Bruce Duncan, chairman of the board of directors of Starwood Hotels & Resorts Worldwide.
“Marriot”™s revised offer provides the highest value to our shareholders through long-term upside potential from shared synergies and ownership in one of the world”™s most respected companies, as well as significant upfront cash consideration,” he said.
In November 2015 Marriott initially offered $12.2 billion for Starwood and its hotel brands, including Sheraton and Westin. The bid was interrupted in mid-March with an all-cash bid of $13.16 billion by Anbang and its consortium members, investment firms J.C. Flowers & Co. of New York and Primavera Capital Limited of China.
Now, with Marriott offering an amendment to its initial agreement, giving Starwood shareholders $21 in cash and 0.80 shares of Marriot International Inc. Class A common stock for each share of Starwood Hotels & Resorts Worldwide Inc. common stock, Starwood has stated the new offer totaling $13.6 billion ($79.53 per share) is a superior proposal and has agreed to cease negotiations with the Anbang consortium.
In addition, Starwood stockholders are expected to receive separate consideration in the form of Interval Leisure Group common stock from the spinoff of the Starwood timeshare business and subsequent merger with ILG, currently valued at $5.83 per Starwood share, based on ILG”™s share price as of market close on March 18.
Both companies continue to expect the closing of this transaction will occur well before the planned date of the Marriot-Starwood merger closing. The amended agreement and the ILG transaction have a combined current value of $85.36 per share of Starwood common stock.
The deal with Anbang would reportedly have been the largest ever with a Chinese company in the United States, according to Reuters.
The combination of Starwood and Marriott will create the world”™s largest hotel company with 1.1 million rooms in more than 5,500 international hotels.
“After five months of extensive due diligence and joint integration planning with Starwood, including a careful analysis of the brand architecture and future development prospects, we are even more excited about the power of the combined companies and the upside growth opportunities,” said Arne Sorenson, president and CEO of Marriot.
Starwood”™s historic deal coincides with another major milestone as the company has taken advantage to increasingly open relations between the U.S. and Cuba and has signed three new hotel deals in Cuba, marking the first U.S.-based hospitality company to enter the market in nearly 60 years.
“With Cuba”™s rich history, natural beauty and strong culture, there is no question the entire U.S. hospitality industry has watched Cuba with great interest, and we are thrilled to lead the charge and bring our sophisticated, high-end brands into the market at this inflection point,” said Starwood CEO, Thomas B. Mangas.
According to Starwood, long-time Havana icon, Hotel Inglaterra, will join The Luxury Collection and Hotel Quinta Avenida will become a Four Points by Sheraton. Both hotels will undergo renovations before raising their new brand flags later in 2016. The company also announced that it has signed a Letter of Intent to convert the famed Hotel Santa Isabel into a member of The Luxury Collection.
“Hotel conversions, like those we announced today, allow us to preserve history, architecture and culture while offering a unique branded experience. With our long-standing, locally based and highly experienced team in Latin America and the Caribbean, we look forward to welcoming guests to Cuba for many decades to come,” said Jorge Giannattasio, Starwood”™s senior vice president and chief of Latin America operations.
