Since November of last year Marriott International had agreed to a merger with Starwood Hotels & Resorts Worldwide in a deal worth 12.2 billion dollars. That is until early March when a Chinese consortium, including Anbang Insurance Group Co., moved in on the deal, offering Starwood $12.6 billion, and later $13.2 billion. Marriott countered on March 21, with a $13.6 billion dollar offer. Well, not to be outdone, Anbang came back yet again on Monday, offering $14 billion dollars.
Marriott says it remains committed to the Starwood merger, and believes stockholders would benefit more with them in the long run. Marriott is moving to become the world’s largest lodging company with this merger, believing in ever expanding growth. Anbang, on the other hand, is looking to diversify their already lucrative portfolio of U.S real estate investments. The Anbang consortium’s all-cash offer might be more appealing for Starwood shareholders to Marriott’s offer which is a combination of cash and stock.
Although Starwood has yet to change its recommendations to shareholders in support of the Marriott merger, analysts say it is possible the Anbang Consortium, which includes J.C. Flowers & Co. and Primavera Capital could go higher. The fact that Marriott has already had to bargain early on with Starwood, twice in fact, to Starwood’s favor, means this bidding war could be in the early stages.