Starwood attracting Chinese interest

Starwood, which owns W London (left), among others, has said it is considering a sale.
Starwood, which owns W London (left), among others, has said it is considering a sale.PHOTO: REUTERS

NEW YORK • China's sovereign wealth fund and two big Chinese companies have expressed interest in Starwood Hotels & Resorts Worldwide, joining other potential suitors from around the world, a source familiar with the matter said.

Starwood Hotels, the owner of St Regis and Sheraton hotel brands, has indicated it is considering a sale, and its highly prized collection of properties has also garnered interest from wealthy Middle Eastern investors and other global firms, the person said.

Lodging giant Shanghai Jin Jiang International Hotels Group Co, Hainan Airlines Co's parent HNA Group as well as sovereign wealth fund China Investment Corp have expressed interest in Starwood, according to the source, who was not authorised to speak on the record.

The three Chinese entities have submitted proposals to the Chinese government over the past two months to allow them to compete to buy Starwood, the Wall Street Journal reported, citing sources.

Beijing is expected to select a single bidder in the next few weeks, the Journal said. China's government wants only one bidder so as not to drive up the price by bidding against one another, the paper said.

Starwood shares rose as much as 12.5 per cent to US$77.10 on Tuesday, giving the company a market value of about US$13 billion (S$18.1 billion). Starwood said it did not comment on market rumours or speculation.

Shanghai Jin Jiang International Hotels Group, HNA Group and China Investment Corp did not respond to requests for comment.

In the past, Chinese companies have bought other US hotel properties, most notably the Anbang Insurance Group's purchase of New York's Waldorf Astoria last year without objection from the US government. But if a Chinese company does emerge as the ultimate buyer for Starwood, it could be controversial.

The government is unlikely to step in and stop this proposed transaction, although it may shift sensitive meetings out of Starwood properties or ask for particular hotels to be sold if they are near sensitive military institutions, said Mr Paul Marquardt, a Cleary Gottlieb lawyer who is an expert on foreign investment in the US.

Meanwhile, Starwood has agreed to spin off and sell its timeshare unit to Interval Leisure Group, in a deal valued at about US$1.5 billion. The transaction for the unit, called Vistana Signature Experiences, includes 22 timeshare resorts with more than 220,000 owners and more than 5,000 employees, according to a statement from both firms yesterday.

REUTERS

A version of this article appeared in the print edition of The Straits Times on October 29, 2015, with the headline 'Starwood attracting Chinese interest'. Print Edition | Subscribe