Anbang offers $13.2bn cash for takeover of Starwood
Anbang led by Wu Xiaohui, is determined to takeover the US company, after Starwood Hotels and Resorts said a $13.2 bn cash bid from a group led by Anbang, China’s Primavera Capital and US private equity Group JC Flowers, thereby trumping its planned deal with Marriott International. Mr Wu is married to the granddaughter of Deng Xiaping China’s former leader and architect of the country’s economic transformation. On Sunday 20th march 2016, Anabng agreed a $6.5bn acquisition of 16 luxury US hotel properties from private equity group Blackstone. It paid $2bn for New York’s Waldrof Astoria in 2014. Buying Starwood would transform it to one of the world’s leading hotel groups.
The owner of the Sheraton, W Hotels and Westin brands said the Marriott would have 10 days to improve its own offer or else it would terminate a deal agreed last November in favour of Anbang’s superior proposal.
Starwood described the $78 per share, all cash offer from Anbang as fully financed and enjoying a high degree of closing certainty. Starwood shares were up 4.9 per cent at $80.13in the afternoon trading in New York. The group also is selling their time-share business for about $5.67 a share.
Marriott’s cash and stock offer was valued at $12.2bn, but as the share prices declined in Marriott’s shares are valued at$65.33 or $11bn according to Starwood.
Anbang was prepared to pay more for Starwood because it was taking a long term view., where as Marriott was constrained by their short term mentality driven by quarterly results.