(MENAFN- AFP) Starwood Hotels said Friday that it favors a takeover bid from a consortium led by China's Anbang Insurance over an earlier deal with Marriott, after the Anbang group increased its offer.
Starwood's board was persuaded by Anbang's $2 increase in its Monday offer to $78 a share, and said it plans to notify Marriott International that their already agreed merger was off.
Starwood had agreed to Marriott's $63.74 per share cash-and-stock offer last November for its network of 1,270 properties in 100 countries, including the Westin, Sheraton, Le Meridien and W brands.
But the Chinese giant stepped in the way this week as it announced nearly $20 billion in two proposed hotel takeover deals.
The Anbang proposal values Starwood at $13.2 billion and comes as the Chinese giant has also agreed to buy a portfolio of 16 luxury hotel and resort properties from the Blackstone group for $6.5 billion.
With the new Anbang offer, Starwood's board said in a statement that it "intends to terminate the Marriott merger agreement and enter into a definitive agreement with the consortium."
The news pushed Starwood shares up 4.5 percent to $79.91 in early trade. Shares of Marriott, which will earn a $400 million fee for Starwood cancelling their deal, rose 2.0 percent to $73.23. Anbang is privately controlled.
Anbang's partners in the deal include China-based Primavera Capital and US private equity investor JC Flowers & Co.
Anbang first pushed into the US hospitality industry in October 2014 by acquiring the famous Waldorf Astoria Hotel in Manhattan for nearly $2 billion from Hilton Worldwide Holdings.
The purchases are part of an aggressive international push by the 12-year-old insurer, which reports assets of 1.65 trillion yuan ($254 billion), more than 3,000 branches in China and over 30,000 employees globally.
In November, Anbang bought US insurer Fidelity & Guaranty Life for $1.6 billion, after snapping up Korean insurer Tong Yang Life for around $950 million and Dutch insurer Vivat for about $167 million earlier in the year.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.