Hyatt keeps mum about talks to buy Starwood

The Park Hyatt Paris-Vendome in France. Both Hyatt and Starwood have been hampered by several consecutive quarters of declining sales. A combination could help them better compete with their larger peers Marriott International and Hilton Worldwide.
The Park Hyatt Paris-Vendome in France. Both Hyatt and Starwood have been hampered by several consecutive quarters of declining sales. A combination could help them better compete with their larger peers Marriott International and Hilton Worldwide.PHOTO: AGENCE FRANCE-PRESSE

NEW YORK • The Hyatt Hotels is in talks to acquire Starwood Hotels and Resorts Worldwide, two people briefed on the matter said.

The cash-and-stock bid could be announced in the next few weeks, although the discussions were continuing and could still fall apart, they said. They requested anony-mity as the talks were private.

Starwood on Wednesday reported a 19 per cent fall in net income in the third quarter compared with the same period a year ago.

A deal would be driven, in part, by the hoteliers' growth struggles. Both Hyatt and Starwood have been hampered by several consecutive quarters of declining sales.

An uncertain economic picture has caused global business travel spending to slow, while swings in the currency markets have also put a dampener on travel.

A combination of Hyatt and Starwood could help the two chains better compete with their larger peers Marriott International and Hilton Worldwide.

Starwood on Wednesday said it agreed to sell its Resorts' Vacation Ownership business to the Interval Leisure Group for about US$1.5 billion (S$2.1 billion). It has also been in talks with at least one company in China, one of the people said.

Hyatt declined to comment on the talks, and Starwood could not be reached for comment.

A sale of Starwood has been on the table for at least six months.

The company said in April that it was evaluating options, including a sale of itself.

The hotel chain - known for brands such as Sheraton, St Regis and Westin - was affected by a depressed stock price and management turnover that led to it seeking other options.

"A new buyer has the opportunity to inject some new money and fresh ideas into that brand," according to analyst C. Patrick Scholes from SunTrust Robinson Humphrey.

NEW YORK TIMES

A version of this article appeared in the print edition of The Straits Times on October 30, 2015, with the headline 'Hyatt keeps mum about talks to buy Starwood'. Print Edition | Subscribe