BEIJING • As Marriott International tries to lock down its purchase of Starwood Hotels & Resorts Worldwide with a sweetened bid, China's Anbang Insurance Group remains a potential spoiler.
The onus is on the Beijing-based insurer and its partners to increase their US$13.2 billion (S$17.9 billion) cash offer after Starwood said it would accept a revised cash-and-stock bid by Marriott, now valued at about US$13.6 billion.
"I have to believe there is at least one more act to this play," said Mr Frank Aquila, a partner in mergers and acquisitions at law firm Sullivan & Cromwell in New York, who is not involved with the deal. "Anbang seems to be very aggressive in its recent bids and if it's worth this much to Marriott, Anbang may well come back with a little bit more."
The takeover battle for Starwood pits Anbang chairman Wu Xiaohui, 49, against Marriott chief executive officer Arne Sorenson, 57.
Mr Wu has a history of swooping in at the last minute to forge deals. A successful purchase by Anbang's group would mark the biggest purchase of an American company by a Chinese buyer.
Chinese investors have been accelerating acquisitions of hotels and other types of real estate in an effort to acquire hard assets outside of their home country, where the economy is slowing and currency devaluations are a concern. Marriott, for its part, wants Starwood's pool of loyal guests and its well-known brands, which include W, St. Regis, Westin and Sheraton.
Starwood said on Monday that it amended its merger agreement with Marriott, first reached in November last year, to reflect a revised price of 0.80 Marriott share plus US$21 a share in cash.
The new offer is valued at US$78.84 a share based on Marriott's closing price Monday.
Anbang's latest bid, disclosed on Friday, was US$78 a share.
"I think there is room for the Anbang consortium to come in at a higher price, even with the US$50 million increase in the break-up fee," said Mr Lukas Hartwich, senior lodging analyst at Green Street Advisors.
"It doesn't appear the market expects a much higher offer, which is interesting given Anbang's aggressive track record."
Anbang representatives declined to comment. The company, which is working with J.C. Flowers and Primavera Capital, last year bought Manhattan's landmark Waldorf Astoria for US$1.95 billion.