The saga over future control of Starwood Hotels continues. Marriott has now made a new stock/cash offer that values the company higher than the all cash offer made by Anbang.
The new offer would give Starwood shareholders $21 in cash + 0.8 shares of Marriott for every share.
Here’s an excerpt from WSJ:
Starwood Hotels & Resorts Worldwide Inc. said it has agreed to a sweetened $13.6 billion deal with Marriott International Inc. on Monday, trumping last week’s boosted bid from a group led by China’s Anbang Insurance Group Co.
In the new deal, Starwood shareholders will receive $21 in cash and 0.8 shares of Marriott for each share of Starwood. The deal values Starwood shares at $79.53, according to Friday’s closing prices.
Starwood shares closed Friday at $80.57 after Anbang swooped in and made an offer Starwood had deemed superior, saying it would pay $78 a share in cash for the firm, up from its earlier offer of $76 a share, totaling about $13.2 billion.
Here’s from Financial Times what would justified the higher price:
To help justify the loftier price tag it’s put on Starwood, Marriott said it expects combining the companies will generate $250m a year in annual savings within two years of the deal’s completion. That’s up from the $200m earmarked in the first agreement signed in November.
And Reuters reports that the new breakup fee would be $450M:
Under the revised agreement, Starwood will pay a breakup fee of $450 million, up from $400 million previously.
It is interesting to see if Anbang lead consortium will do new counteroffer.
Starwood takeover by Marriott would mean nothing but negative changes to members of SPG once the program is merged to Marriott Rewards (probably sometime late 2017/early 2018).