Anbang Raises Starwood Bid to $14 billion in Hopes of Triggering ‘Superior Proposal’

Marriott reaffirms commitment to merge with Starwood despite increased bid.

An investor consortium led by Anbang Insurance has once again raised the ante for Starwood Hotels and Resorts, improving their bid in a second attempt to break up plans with Marriott Worldwide. The group will increase their purchase proposal to $82.75 per share, valuing Starwood at $14 billion.

Under the terms of the deal outlined in a Starwood press release, the proposal reflects an increase of $4.75 per share from their previous bid. Combined with the planned spin-off of the vacation rental business, the new bid could once again trigger a “superior proposal,” allowing the hotelier to temporarily suspend their plans with Marriott.

“Starwood’s Board, in consultation with its legal and financial advisors, determined that this proposal is reasonably likely to lead to a ‘Superior Proposal,'” the press release reads. “Allowing Starwood to engage in discussions with, and provide diligence information to, the Consortium in connection with its proposal.”

Despite the increased bid, Marriott remains dedicated to their plan to merge with Starwood. In a press release of their own, the hotel chain once again declared their belief that the plan reflects “the best course for both companies,” despite the higher purchase price by the Anbang consortium.

“The combined company will offer stockholders significant equity upside and greater long-term value driven by a larger global footprint, wider choice of brands for consumers, substantial revenue synergies, and improved economics to owners and franchisees,” the Marriott release declares. “Leading to accelerated global growth and continued strong returns.”

Marriott’s message mirrors their campaign to win over shareholders’ approval for the merge. Last week, the Maryland-based hotelier sent a letter to shareholders explaining the overall value proposition, leading with the growth opportunities for the combined hotel chain.

The Anbang-lead bid is the latest twist in the hotel merger triangle saga. On March 18, Starwood was prepared to end the proposed merger with Marriott in favor of the original Anbang proposal, only to reverse course when Marriott increased their bid to $13.6 billion.

[Photo: AP Photo/Andy Wong]