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Battle Ensues for Ownership of Starwood

Two companies are battling it out to purchase Starwood, with the most recent bid at $14 billion.

Marriott International Inc., which entered a deal late last year with Starwood Hotels and Resorts Worldwide to buy the chain, is facing some new competition. Anbang Insurance Group, a company based in China, has put in a new bid for the Starwood properties — a $14 billion bid. Marriott’s proposed purchase price was only $12.2 billion.

According to the Washington Post, Starwood is still leaning toward the Marriott deal but will review the Anbang bid. And if Starwood decides to change buyers, the company will face a hefty $400 million termination penalty. Marriott and Starwood shareholders are voting on that deal March 28. But, Marriott is confident in its offer and does not appear to expect any issues with the sale.

Anbang Insurance Group is a relative newcomer to the U.S. scene — though well-known in China, it’s just making waves stateside. In 2014, the company bought the Waldorf Astoria in New York for about $2 billion, and just a few days ago, it bought Strategic Hotels and Resorts Inc. for $6.5 billion. The company has also purchased Canadian and Dutch businesses in the last two years. According to the Financial Times, Anbang tried to purchase Starwood last year as the company underwent a strategic review, but the deal didn’t go through.

Anbang’s offer breaks down to $76 for each Starwood share, and Interval Leisure Group Inc. stock valued at $5.50 per share. Marriott’s bid works out to a substantially less $63.74 per share.

[Photo: Starwood]

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