The new deal will now cater to both leisure, as well as, business hotels in metro Detroit. However, it was shared by Sorenson that it is too early now to predict the total number of hotels that will get added after the finalization of the deal. The strengths of the company have been seen in numerous areas. Some of them include its growth in revenue, net income increase, growth in per share earnings, and great flow of cash from its operations.
How would the merger affect the shareholders?
Both these hotels host meetings and conventions of group holdings in the city. Marriott International Inc. (NASDAQ:MAR) not only boasts of an eponymous chain, it is also known for operating hotels like Residence Inn and Courtyard hotels. On the other hand, the Starwood brand comprises of hotels like Sheraton, St. Regis and W Hotels. The value of the transaction is about $72.08 for every Starwood Hotels & Resorts Worldwide Inc (NYSE:HOT) share.
The shareholders of Starwood would own around thirty-seven percent of the new combined company. The deal is expected to be closed in the middle of 2016 after the regulatory and shareholder approvals are complied with. According to the website of Starwood, The Four Points is the sole hotel belonging to Starwood in the state.
On October 28, CNFBC reported that there were takeover talks conducted by Hyatt Hotels Corporation (NYSE:H) with Starwood. However, Bruce Duncan, who is Starwood’s chairman for its board of directors shared in a recent statement that the board came to a conclusion that a merger with Marriott group would provide the highest value to its shareholders in the long-term and the strongest forward -looking path for the company. What appealed Marriott was the large global presence of Starwood and its popularity with travelers in the younger age group.
Key team members
According to the new merger deal between these two companies, Marriott would take up the lead and its present Chief Executive Office will head the new company. Expectations are there with Fitch that Marriott would take care of the outstanding unsecured bonds of Starwood. It may also handle to refinance any of the bonds of Starwood that may have to go through alterations due to this new transaction.
Dunn & Crutcher is Marriott’s global legal counsel while Deutsche Bank securities would act as its financial advisor. There are some anonymous sources that said that Starwood tried everything possible to seek a buyer for its hotels.