March 14, 2016

Starwood Back in Play

Back in November, I wrote about Marriott reaching a deal to purchase Starwood Hotels & Resorts at around $72 per share.  While the deal has been making progress (receiving key regulatory approval recently) the deal wasn't expected to close for another 3-6 months.  There was also a  provision in the deal which enabled Starwood to receive competing bids from other firms.

Well this morning, there is news circulating that Starwood received an unsolicited bid from a Chinese firm at $76 a share.  The name of the Chinese firm has not been disclosed.

Update:  The name of the firm has been disclosed and is Anbang Insurance Group who recently purchased the Waldorf Astoria in New York for about $2B.  Anbang is also working on purchasing's Blackstone's hotel portfolio in a bid said to reach $6.5B.

While this wasn't out of the realm of possibility, I figured if it was going to happen, it would have happened months ago.  The provision enabling Starwood to receive competing bids expires this week (3/17).

It's hard to know exactly if this deal would be "better or worse" as far as SPG members go.  I would have to imagine keeping Starwood intact would be better...and given Starwood's strong presence, growth, and loyalty in the Asia Pacific region, I would have to think that would be the firm's objective.

We'll have to wait and see at this point...but certainly an interestingly development!

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