Late Chinese bid to takeaway Starwood from Marriott deal

A Chinese-led consortium is looking to trump Marriott International’s agreed takeover of Starwood Hotels & Resorts Worldwide in a deal valued at US$63.74 per share. Anbang Insurance Group has been identified as the lead late runner on the rails that has bid a reported US$13bn, valuing Starwood shares at $76 each. Starwood is the owner of the Sheraton, Aloft and W hotel brands. Anbang, which is also buying Strategic Hotels & Resorts for $6.5bn from Blackstone Group, is understood to have teamed up with JC Flowers and China’s Primavera Capital Group to make the last minute unsolicited bid for Starwood. The Chinese offer comes in at a 20% premium to the value of the Marriott offer. It is also an all-cash bid, whereas Marriott’s is largely paper, comprising only $2 a share in cash. Starwood’s board has said it would “carefully consider” the outcome of its discussions with the Chinese consortium but had not changed its positive recommendation of the Marriott offer. Both Marriott and Starwood shareholders are due to vote on the initial deal by the end of the month. Marriott called the late Chinese offer as “highly conditional and non-binding”. If Marriott’s bid is successful, the new entity would have 5,500 hotels and more than 1.1m rooms in over 100 countries. Anbang bought the Waldorf Astoria in New York last year for nearly $2bn in a sale and manage-back deal that keeps Hilton in situ for the next 100 years. Its deal for Starwood would represent China’s biggest purchase of a US company. Anbang’s chief executive, Wu Xiaohui, last year said his investment team had been hunting the world for deals. “We must win the first battle and every battle thereafter as we are representing Chinese enterprises going global,” Mr Wu told Harvard students in a recent speech.