NEW YORK – Marriott won over Starwood with a sweetened bid worth more than $14.4 billion (almost Rs 1 lakh crore) just days after a Chinese insurance company appeared to steal the deal away from the hotel chain with a more lucrative offer.
The buyout, which may still be contested by China’s Anbang, would create the world’s biggest hotel company and give Marriott a stable of properties run by Starwood such as the Hotel Del Coronado in San Diego.
Starwood, which owns Sheraton, Westin and St. Regis, over the weekend became the first US hotel operator to gain access to Cuba, a day before the arrival of President Barack Obama. It is the first visit to Cuba by a sitting president in almost 90 years as relations between the two nations thaw.
The revised deal would give Starwood shareholders $21 in cash and 0.80 shares of Marriott International Inc. Class A stock for each Starwood share. Starwood shareholders are also expected to get Interval Leisure Group stock valued at $5.83 per share. Taken together, that would value Starwood stock at $85.36 per share, or about $14.41 billion.
Marriott has more than 4,400 properties in 87 countries and territories, under brands such as Ritz-Carlton, Residence Inn and Marriott. Starwood has nearly 1,300 properties in about 100 countries.
The two collectively are associated with 108 hotels in India. While Marriott runs 33 hotels including the JW Marriott and Courtyard brands, Starwood standards are used by the Sheraton, Le Meridien and Aloft chain of hotels.
It also tied-up with ITC in 2007 to establish Starwood’s Luxury Collection, which has 11 hotels including the ITC Maurya in New Delhi.
Just days ago, Anbang put up an offer of $83.83 for each Starwood share, or approximately $14.15 billion. Starwood stockholders would have received $78 in cash for each share they own plus $5.67 in stock for a spin-off of a vacation business.
Marriott said Monday that it is confident that it can achieve $250 million in annual cost savings within two years of closing on the Starwood transaction.
Marriott and Starwood still anticipate the deal closing around midyear, assuming it receives the necessary approvals. Shares of Starwood gained $3.68, or 4.6%, to $84.25 before the market open. Shares of Marriott, shed 51 cents to $72.65.
