Pro-Life
8 years ago
Starwood Gets Higher Offer From Anbang-led Group, Threatening Marriott Deal--4th Update
Date : 03/28/2016 @ 1:47PM
Source : Dow Jones News
http://ih.advfn.com/p.php?pid=nmona&article=70907264
By Joshua Jamerson
The battle for Starwood Hotels & Resorts Worldwide Inc. continued Monday as the group led by China's Anbang Insurance Group Co. increased its bid for the hotelier to $14 billion, raising the stakes in the high-profile bidding war with Marriott International Inc.
Starwood said the new offer from Anbang, a Chinese insurance giant, is likely to be a "superior proposal" to Starwood's $13.6 billion takeover agreement with Marriott. Such a designation allows Starwood to engage in discussions with and provide diligence information to the consortium in connection with its proposal.
Marriott on Monday reaffirmed its commitment to acquiring Starwood, arguing that its deal was the best course because the combined company would have a larger global footprint with a wider choice of brands for consumers. In addition, Marriott warned Starwood stockholders about getting lured by the higher offer.
Starwood stockholders "should give serious consideration to the question of whether the Anbang-led consortium will be able to close the proposed transaction, with a particular focus on the certainty of the consortium's financing and the timing of any required regulatory approvals," Marriott said.
Representatives from Anbang and Starwood declined to comment on Marriott's comments.
Starwood's stock rose 2.2% to $83.93 in midday trading in New York, as Marriott's shares increased 3.8% to $71.27.
The revised, nonbinding offer from the Anbang group raises the proposed all-cash purchase price to $82.75 a share. Anbang's consortium also includes J.C. Flowers Co. and Primavera Capital Ltd.
Starwood, the owner of the Westin and Sheraton brands among others, said it received a sweetened offer from Anbang of $81 a share in cash on Saturday. Later that day, following discussions between the two parties, the Anbang consortium raised its all-cash proposal to $82.75 a share.
In comparison, the Marriott agreement valued Starwood's shares at $79.53 each. Under that revised deal, Starwood shareholders would receive $21 in cash and 0.8 Marriott shares for each Starwood share.
The original deal between the two companies, in November, valued Starwood at $72.08 a share. Earlier this month, the group led by Anbang offered $76 a share in cash and then raised its offer to $78 a share.
A combination of Starwood and Marriott--the owner of Courtyard by Marriott and the extended-stay Residence Inn--would create the world's No. 1 hotel chain with more than 1 million rooms and 30 brands.
On Monday, Marriott and Starwood each adjourned their respective stockholder meetings to vote on the transaction until April 8. If blessed by regulators and shareholders, the deal could close in mid-2016, the companies have said.
If the Marriott deal falls apart, Starwood would pay a breakup fee of $450 million, up from $400 million in the previous pact. If that fee is triggered, Starwood also would be on the hook to pay Marriott as much as $18 million for costs related to financing the deal.
The Wall Street Journal had reported, citing a person familiar with Anbang's thinking, that the slight increase in the breakup fee indicated that Starwood was leaving the door open for Anbang to raise its offer again.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
March 28, 2016 13:32 ET (17:32 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Pro-Life
8 years ago
Starwood Takes Sweetened Offer
Date : 03/22/2016 @ 3:02AM
Source : Dow Jones News
http://ih.advfn.com/p.php?pid=nmona&article=70848193
Starwood Hotels & Resorts Worldwide Inc. said it has agreed to a sweetened $13.6 billion deal from Marriott International Inc. that trumps last week's boosted bid from a group led by China's Anbang Insurance Group Co.
In the new deal, Starwood shareholders will receive $21 in cash and 0.8 of a share of Marriott for each share of Starwood. The deal values Starwood's share at $79.53, according to Friday's closing prices.
Starwood stock closed at $80.57 on Friday after Anbang swooped in and raised its offer to a level Starwood called superior. That offer was for $78 a share in cash, totaling roughly $13.2 billion.
Marriott's latest offer significantly increases the share of cash it will pay for Starwood, since its previous offer had been 0.92 share of Marriott for each Starwood share and $2 in cash. Shares of Starwood rose 4.5% Monday to $84.19, while shares of Marriott fell 1.2% to $72.30.
An Anbang representative declined to comment.
Marriott said it expects the deal to be roughly neutral to its earnings over the next two years. The company expects $100 million to $130 million in transaction-related charges and transition costs.
"We are pleased that Marriott has recognized the value that Starwood brings to this merger and enhanced the consideration being paid to Starwood shareholders," said Starwood Chairman Bruce Duncan.
Marriott Chief Executive Arne Sorenson said on a call with investors and analysts that the company believes there are "more cost synergies" than previously estimated, with savings now estimated at $250 million, up from $200 million, by 2018, according to transcript of the call.
"We are also helped by a more efficient deal structure with a greater percentage of cash," he said. "And finally, we were helped by a modest recovery in our stock value in recent weeks, as the disconnect between stock performance and hotel fundamentals narrowed considerably."
The higher cash offering, however, means Marriott will issue roughly 20 million, or 14%, fewer shares than the original agreement.
Under the new deal, the breakup fee that Starwood would pay if it chooses another suitor could be elevated in certain situations to $450 million from its previous $400 million level.
If that fee is triggered, Starwood would also be on the hook to pay Marriott as much as $18 million for costs related to financing the deal.
A person familiar with Anbang's thinking called the raise in the breakup fee "very marginal" and said it is indicative that Starwood is leaving the door open for Anbang to raise its offer again.
"The big question this week will be whether Anbang elects to increase its offer and drive a bidding war," said Canaccord analyst Ryan Meliker. "While we don't expect that dynamic to unfold, it also wouldn't surprise us if it happened."
Mr. Meliker said he believes this is the best bid Marriott is willing to make.
A combination of Starwood and Marriott -- the owner of Courtyard by Marriott and the extended-stay Residence Inn -- would create the world's No. 1 hotel chain with more than 1 million rooms and 30 brands.
Anbang, meanwhile, has been hungry for hotel assets, having recently agreed to buy U.S. luxury hotel owner Strategic Hotels & Resorts Inc. from Blackstone Group LP for about $6.5 billion including debt.
About two years ago, Anbang struck a deal to purchase the historic Waldorf Astoria in Manhattan for nearly $2 billion. Anbang's partners in the bid for Starwood included Primavera Capital Group and J.C. Flowers & Co.
The interest in Starwood has come amid the strategic review process the hotel operator launched last year.
Starwood has reportedly fielded interest from companies around the globe after opening the door to a sale, spurred by its concerns that its growth was lagging that of its rivals.
(END) Dow Jones Newswires
March 22, 2016 02:47 ET (06:47 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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