Starwood Hotels & Resorts Worldwide Inc. (NYSE: HOT) accepted a revised offer from Marriott International Inc. (NASDAQ: MAR) with a higher valuation after saying last week that it received an unsolicited takeover proposal from China’s Anbang Insurance Group Co.
Marriott increases the cash portion of the new deal. Starwood shareholders will receive $21 a share in cash and 0.80 share of Marriott common stock for each Starwood share. The new offer will represent a valuation of $79.53 a share, or $13.6 billion, based on Marriott’s closing price on Friday. This new offer is higher than the all cash offer from the Chinese investment group led by Anbang, with a cash bid of $78 share, or about $13.2 billion.
The new deal was improved from the agreement that Marriott reached with Starwood in November. Under the previous offer, Starwood shareholders would receive $2 in cash a share and 0.92 share of Marriott common stock for each Starwood share, representing a valuation of $12.2 billion, or $72.08 a share.
“We are pleased that Marriott has recognized the value that Starwood brings to this merger and enhanced the consideration being paid to Starwood shareholders,” said Bruce W. Duncan, the chairman of Starwood. “We continue to be excited about the combination of Starwood and Marriott, which will create the world’s largest hotel company with an unparalleled platform for global growth in the upscale segment.”
This new deal shows Marriott’s determination to complete the acquisition. A combination of Marriott and Starwood would create the world’s largest hotel chain, with about 30 brands, 5,500 owned hotels and 1.1 million rooms around the world. Marriott expected that the combined company would save about $250 million a year after the merger.
The Beijing-based insurance company Anbang declined to comment.
Starwood shares jump 4.22 percent to $83.98 while Marriott shares drop 1.21 percent to $72.28 at 3:08 p.m.