Starwood Hotels & Resorts Worldwide Inc. has received a takeover offer from a group led by China’s Anbang Insurance Group Co., threatening to upend Starwood’s $12.2 billion tie-up with Marriott International Inc. By 2009, the company had assets of $5.1 billion.
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Its early investors were Shanghai Automotive Industry Corp., Chinese oil and gas company Sinopec and other large state-owned enterprises. “This is being driven by global market volatility, the continued strength of the US dollar and increased allocations for commercial real estate in an effort to diversify investment portfolios”.
China’s biggest investors are looking for high-yielding assets to park their money as economic growth is slowing. Please see our terms of service for more information.
Among the Strategic Hotels properties are the Four Seasons Resort in Jackson Hole, Wyoming, Ritz-Carlton locations in California, and the Fairmont Scottsdale in Arizona.
And according to Bloomberg, Anbang has also committed to buy Strategic Hotels & Resorts Inc., which owns 16 properties in the U.S. In other words, this is a company with big plans, and the financial resources to pursue them.
Anbang and Blackstone have signed a firm agreement and the transaction could be announced in the coming days, a person with knowledge of the situation told AFP on Monday. It also believes that the two companies’ merger is the best decision for both parties.
Marriott said that it “reaffirmed its commitment to acquire Starwood” and described the Chinese bid as “highly conditional and non-binding”. The $6.5 billion deal would be the largest USA real estate purchase by a company from China in history, according to Bloomberg, which first reported on the Strategic Hotels acquisition.
A group led by Anbang Insurance has submitted an unsolicited $76-a-share cash bid for Starwood, an offer that betters the cash-and-shares deal the American company struck with Marriott in November.
The offer of US$76 per share in cash values Starwood at US$12.84 billion.
Marriott shareholders were scheduled to meet March 28 to vote on the Starwood acquisition. The waiver will expire at 11:59pm ET (0359 GMT) on Thursday.
Wes Golladay, a research analyst with RBC Capital Markets, said Anbang has a “legitimate chance” at buying Starwood because of the high premium it’s willing to pay.
Buying Strategic Hotels and combining it with the Waldorf Astoria would give Anbang thousands more rooms, as well as meeting and banquet space.
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Tim Craighead, director of Asian Research/Gaming & Lodging for Bloomberg Intelligence, said the new offer is a “very surprising development” because the deal with Marriott seemed to be “done”.
