STAMFORD, CT—Starwood Hotels & Resorts Worldwide Inc. said Thursday evening that a group led by Anbang Insurance Group Co, Ltd. is dropping its pursuit of the company after coming back earlier this week with a $14-billion counteroffer. The Chinese insurer's abandonment of its bid to buy Starwood appears to clear the way for the merger between Starwood and Marriott International Inc., first announced this past November.
Anbang cited “market considerations” in walking away from the deal, which Starwood's board was on the verge of considering a “superior proposal” to its revised merger agreement with Marriott. Starwood had said this past Monday that it was continuing to discuss non-price terms with the Anbang group, which also includes J.C. Flowers & Co. and Primavera Capital Ltd.
“Throughout this process, we have been focused on maximizing stockholder value now and in the future,” Starwood chairman Bruce Duncan said Thursday. “Our board is confident this transaction offers superior value for Starwood's stockholders, can close quickly and provides value-creation potential that will enable both sets of stockholders to benefit from future financial performance.”
The revised agreement by which the merger will be consummated is based on Marriott's March 21 response to Anbang's initial bid. Starwood shareholders will receive $21 in cash and 0.80 shares of Marriott Class A common stock for each share of Starwood common stock. The deal values Starwood at abut $13.3 billion.
Shareholders in both Starwood and Marriott are scheduled to vote on the merger on April 8. It would create the world's largest hotel company, which would operate or franchise more than 5,500 lodging properties with 1.1 million keys worldwide. Post-merger, Marriott CEO Arne Sorensen would continue in the same capacity for the combined organization.
Commenting on Thursday's published reports prior to the formal announcement from Starwood, Fitch Ratings senior director Stephen Boyd said, “The Marriott/Starwood merger looks more probable than it has in weeks in light of Anbang's withdrawn offer. However, nothing about the deal will be fully certain until it closes. While the underpinnings of the deal still point to a positive ratings movement for Marriott, the additional leverage in its revised offer could extend the timeframe. So until we have more information, investors will continue to sit tight.”
STAMFORD, CT—
Anbang cited “market considerations” in walking away from the deal, which Starwood's board was on the verge of considering a “superior proposal” to its revised merger agreement with Marriott. Starwood had said this past Monday that it was continuing to discuss non-price terms with the Anbang group, which also includes J.C. Flowers & Co. and Primavera Capital Ltd.
“Throughout this process, we have been focused on maximizing stockholder value now and in the future,” Starwood chairman Bruce Duncan said Thursday. “Our board is confident this transaction offers superior value for Starwood's stockholders, can close quickly and provides value-creation potential that will enable both sets of stockholders to benefit from future financial performance.”
The revised agreement by which the merger will be consummated is based on Marriott's March 21 response to Anbang's initial bid. Starwood shareholders will receive $21 in cash and 0.80 shares of Marriott Class A common stock for each share of Starwood common stock. The deal values Starwood at abut $13.3 billion.
Shareholders in both Starwood and Marriott are scheduled to vote on the merger on April 8. It would create the world's largest hotel company, which would operate or franchise more than 5,500 lodging properties with 1.1 million keys worldwide. Post-merger, Marriott CEO Arne Sorensen would continue in the same capacity for the combined organization.
Commenting on Thursday's published reports prior to the formal announcement from Starwood, Fitch Ratings senior director Stephen Boyd said, “The Marriott/Starwood merger looks more probable than it has in weeks in light of Anbang's withdrawn offer. However, nothing about the deal will be fully certain until it closes. While the underpinnings of the deal still point to a positive ratings movement for Marriott, the additional leverage in its revised offer could extend the timeframe. So until we have more information, investors will continue to sit tight.”
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