Marriott wins back Sheraton-owner Starwood with new offer
By Mike Stone and Arunima Banerjee
(Reuters) - Starwood Hotels and Resorts Worldwide Inc HOT.N, owner of the Sheraton and Westin brands, accepted a higher $13.6 billion acquisition offer from peer Marriott International Inc (MAR.O: Quote), spurning a bid from China's Anbang Insurance Group.
The move dramatically raises the stakes in the bidding war since the deal with Marriott prohibits Starwood from communicating with Anbang, which already owns New York's Waldorf Astoria hotel.
If Anbang had succeeded with its offer, the acquisition would have been the largest ever by a Chinese company in the United States. It would not comment on Monday on whether it was planning a new bid.
Marriott raised the cash portion of its offer to $21 per share from $2, valuing the total bid, which also includes stock, at $79.53 as of Friday's close of trading. The company had clinched a deal with Starwood in November for $72.08 per share.
"In the further diligence we have completed in last five months, we have become even more convinced of the tremendous opportunity presented by this merger," Marriott Chief Executive Officer Arne Sorenson told analysts on a conference call. "That confidence is reflected in our higher offer."
Starwood shares were up 4 percent at $83.79 in afternoon trading. Marriott was down 1.6 percent at $72.02.
"We believe this is the best bid Marriott is willing to make," Canaccord Genuity analyst Ryan Meliker wrote in a note.
A group led by Anbang had challenged Marriott with an initial non-binding offer of $12.8 billion on March 14, raising it later to $13.16 billion, or $78 per share in cash. Continued...