Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) announced that it received a revised binding offer from the consortium led by Anbang Insurance Group. The offer constitutes a “superior proposal” and Starwood’s board plans to call off the Marriott merger agreement, according to the company’s press release.
The consortium revised its bid to $78 per share in cash, an increase from the $76 per share proposal made on March 10, 2016. This tops Marriott’s earlier bid, which is currently valued at $65.33 (in cash and stock) and has a higher potential to derail the rival’s merger plan.
Anbang’s new offer raised the value of Starwood by nearly $340 million, bringing it to $13.2 billion.
Starwood, the owner of St. Regis, W, Westin, and Sheraton brands, will have to pay Marriott $400 million to break up the merger arrangement. Marriott International, Inc. (NASDAQ: MAR) has until March 28 to make another offer.
Both Marriott and Starwood announced they had agreed to merge in a cash and stock deal that would value Starwood at $12.2 billion last November. The merger, if it still goes through, would create the world’s largest hotel company.
On March 18, Marriott reiterated its interest to acquire Starwood and stated: “Marriott continues to believe that a combination of Marriott and Starwood is the best course for both companies and offers the best value to Starwood shareholders. Marriott is in the process of reviewing the Anbang consortium’s proposal and is carefully considering its alternatives.”
After the news last Friday, shares of Starwood rose 5.1 percent, to $80.32. And shares of Marriott rose 2.3 percent to $73.43.
