The fight over who will own Starwood Hotels and Resorts is continuing. The deal with Marriott is not a sure thing anymore. The Chinese may very well be at the front door of becoming the new owners of this major American hotel group.
Starwood Hotels & Resorts Worldwide, Inc. today announced that its Board of Directors, in consultation with its legal and financial advisors, determined that a revised, non-binding proposal from a consortium consisting of Anbang Insurance Group Co., Ltd., J.C. Flowers & Co. and Primavera Capital Limited (the โConsortiumโ) is reasonably likely to lead to a โSuperior Proposalโ as defined in Starwoodโs merger agreement with Marriott International, Inc.
Anbang Insurance Group is a Chinese holding company whose subsidiaries mainly deal with insurance, banking, and financial services. The company was founded in 2004 as a regionally based property insurance business with its headquarters in Beijing.
J.C. Flowers & Co. is an American private equity investment firm, focused on investments in the financial services sector.
Primavera Capital Group is a leading China-based investment firm, focusing on private equity and special situations opportunities. The firm employs a flexible strategy of growth capital, control-oriented, and restructuring investments and seeks to create long-term value by working closely with portfolio companies to improve operational efficiency, competitiveness, and earnings growth.
On March 26, 2016, Starwood received a non-binding proposal from the Consortium, under which the Consortium would acquire all of the outstanding shares of Starwood common stock for $81.00 per share in cash. Starwoodโs Board, in consultation with its legal and financial advisors, determined that this proposal is reasonably likely to lead to a โSuperior Proposal,โ allowing Starwood to engage in discussions with, and provide diligence information to, the Consortium in connection with its proposal.
Starwood commenced discussions with the Consortium on March 26, 2016 and, in those discussions, the Consortium made a revised proposal with an increased purchase price of $82.75 in cash per share of Starwood common stock. Starwood and the Consortium are continuing to discuss non-price terms related to the Consortiumโs revised proposal, and are working to finalize the other terms of a binding proposal from the Consortium, including definitive documentation.
The Starwood Board, in consultation with its legal and financial advisors, 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. There can be no assurance that discussions will result in a binding proposal from the Consortium, that the Starwood Board will determine that any such proposal is a โSuperior Proposalโ or that a transaction with the Consortium will be approved or consummated on any particular terms or at all.
Under the terms of the Consortiumโs current, revised proposal, the Consortium would acquire all of the outstanding shares of common stock of Starwood for $82.75 per share in cash, an increase of $4.75 per share from the Consortiumโs prior binding proposal on March 18, 2016. Pursuant to separate agreements previously entered into by Starwood, Starwood stockholders would receive additional consideration in the form of Interval Leisure Group (NASDAQ: IILG) (โILGโ) common stock from the spin-off of its vacation ownership business, Vistana Signature Experiences, and subsequent merger with ILG, currently valued at $5.91 per Starwood share, based on ILGโs share price as of market close on March 24, 2016 (the โILG Transactionโ). On this basis, the Consortium proposal and the ILG transaction have a combined current value of $88.66 per share.
As previously announced, Starwood intends to convene its stockholder meeting to consider the merger with Marriott on March 28, 2016, and immediately adjourn the meeting until April 8, 2016. Starwoodโs Board has not changed its recommendation in support of Starwoodโs merger with Marriott.