The race to acquire Starwood Hotels & Resorts took a new turn on Monday, when Marriott International lodged a new bid worth US$13.6 billion.
The Maryland-based hotel giant had previously appeared to have lost out when a Chinese consortium led by the Anbang Insurance Group had an improved US$13.2bn offer for Starwood accepted.
But under the terms of the agreement between Marriott and Starwood, Marriott had the right to lodge a new bid by 28 March. And it has wasted no time in doing so, raising its original US$12.2bn offer by US$1.4bn.
Marriott’s latest bid consists of US$10.0bn of Marriott stock and US$3.6bn in cash. This value’s Starwood at US$79.53 per share. Anbang’s improve bid on Friday was worth approximately US$13.2bn in cash, valuing Starwood at US$78 per share.
Starwood has now accepted Marriott’s new offer.
“We are pleased that Marriott has recognised the value that Starwood brings to this merger and enhanced the consideration being paid to Starwood shareholders,” said Bruce Duncan, chairman of Starwood’s board of directors. “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. We are also pleased with the progress the two companies have made toward closing.”
Arne Sorenson, Marriott’s president & CEO, commented; “After five months of extensive due diligence and joint integration planning with Starwood, including a careful analysis of the brand architecture and future development prospects, we are even more excited about the power of the combined companies and the upside growth opportunities.
“We expect to accelerate the growth of Starwood’s brands, leveraging Marriott’s worldwide hotel development organisation and owner and franchisee relationships,” he added.
There could be another twist in the tale however; Starwood will be able to terminate its agreement with Marriott for a “break-up fee” of US$450 million – US$50m higher than before.
It is unclear however, whether Anbang and its partners will lodge an improved bid; the company has so far been reluctant to comment on its attempts to acquire Starwood.
Starwood acquisition saga
16 Nov 15: Starwood accepts Marriott’s US$12.2bn bid
14 Mar 16: Anbang makes “unsolicited” US$13bn offer
18 Mar 16: Starwood accepts Anbang’s improved US$13.2bn bid
21 Mar 16: Marriott has new US$13.6bn offer accepted