Chinese-led consortium makes bid for Starwood

NEW YORK • Starwood Hotels & Resorts Worldwide, which is being bought by Marriott International, received a separate, unsolicited takeover proposal from a group of companies led by Beijing-based Anbang Insurance Group.

The news comes four months after Marriott agreed to buy Starwood for US$12.18 billion (S$17.6 billion) to create the world's largest hotel chain. The new proposal is US$76 a share in cash for all of the company's outstanding shares, Starwood said in a statement yesterday. That values Starwood at about US$12.9 billion.

It excludes the amount shareholders will receive as part of the previously announced sale of Starwood's vacation ownership business, now valued at about US$5.50 per Starwood share.

While Starwood didn't identify the bidder in its statement, Marriott said Anbang led the group's offer in a separate announcement in which it confirmed its plan to buy Starwood.

Starwood "will carefully consider the outcome of its discussions with the consortium in order to determine the course of action that is in the best interest of Starwood and its stockholders," the hotel operator said.

DIVERSICATION AMID VOLATILITY

US trophy assets continue to be in high demand by offshore investors, both Asian and Middle Eastern.

MS GILDA PEREZ-ALVARADO, a managing director at Jones Lang LaSalle, on Anbang's recent moves to buy Strategic Hotels & Resorts and New York's Waldorf Astoria hotel.

Starwood said it still supports Marriott's offer, which valued the company at US$72.08 per share when it was made. Starwood would have to pay Marriott a US$400 million termination fee in cash if it decides to enter into another deal or change or withdraw its recommendation to its stockholders to vote in favour of the Marriott deal.

Starwood said yesterday that the Marriott offer is worth US$63.74 a share, based on the company's 20-day average stock price through March 11.

Starwood shares rose to US$76 in pre-market trading.

Anbang had at the weekend, entered into a US$6.5 billion agreement to buy 16 US luxury resorts and hotels from Blackstone Group, a record transaction for Chinese buyers of American real estate. The pending acquisition of Strategic Hotels & Resorts will top the insurer's US$1.95 billion purchase last year of New York's landmark Waldorf Astoria hotel, and will give Anbang ownership of trophy properties across the country.

"US trophy assets continue to be in high demand by offshore investors, both Asian and Middle Eastern," said Ms Gilda Perez-Alvarado, a managing director at commercial brokerage Jones Lang LaSalle. "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."

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on March 15, 2016, with the headline 'Chinese-led consortium makes bid for Starwood'. Print Edition | Subscribe