Starwood Hotels & Resorts Worldwide Inc. (NYSE: HOT) said that it receives a higher offer from Chinese investment group led by China’s Anbang Insurance Group Co., showing that bidding war with Marriott still continues.
The new offer raises the purchase price to $82.75 share in cash, or about $14 billion, according to a statement from Starwood on Monday. The company also said that the new offer is likely to lead to a proposal that is superior to the deal with Marriott.
The move comes after Starwood accepted a revised offer from Marriott last week. Under Marriott’s offer, Starwood shareholders will receive $21 a share in cash and 0.80 share of Marriott common stock for each Starwood share, representing a valuation of $79.53 a share, or $13.6 billion, based on Marriott’s closing price on Friday. This deal will make the combined company the world’s largest hotel chain with about 30 brands, 5,500 owned hotels and 1.1 million rooms around the world.
Marriott had a merger agreement with Starwood since November. Under its 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.
But Starwood received an unsolicited takeover proposal from China’s Anbang group on March 26. This proposal offered all cash $81 a share and seemed a better deal for Starwood at that time. This acquisition would help Anbang create a vast investment portfolio of high-yielding U.S. real estate assets.
Anbang’s consortium includes private equity firms J.C. Flowers & Co and Primavera Capital Ltd. An Anbang-led purchase of Starwood would mark the largest takeover of a U.S. company by a Chinese investor.
Starwood shares rose 2.41 percent to $84.12 at 11:56 a.m. in New York.