Marriott and Starwood Push Stockholders to Approve Merger

Executives for both hotel companies give different pitches for approving the revised proposal.

The stockholder campaign for Starwood Hotels and Resorts and Marriott International is heating up as the executives for both hotel chains plea with stockholders to approve their planned merger. In two letters to stockholders filed with the Securities and Exchange Commission, both leaders gave different arguments as to why the hotel chains should come together.

Writing directly to Starwood shareholders, chief executive Thomas B. Mangas stressed the direct financial gain of the revised Marriott offer. Reaffirming the board of directors’ recommendation for the merger, Mangas called for every shareholder to submit an affirmative vote.

“Failure to vote will have the same effect as votes against the Starwood combination transactions proposal,” Mangas wrote. “Your vote is important no matter how many shares you hold.”

On the converse, Marriott chief executive Arne M. Sorenson touted the long-term value of the combined company in his stockholder letter. Going over the financial details in brief, the letter touted the company’s strong credit rating, the cost savings of combining the two companies and the positive outlook by attracting affluent travelers to their combined 30 hotel brands.

“There are significant opportunities to build value for both Marriott and Starwood stockholders from a combined company,” Sorensen wrote in the letter. “Our enhanced loyalty programs should increase access to new customers, create opportunities for new partnerships, and provide greater competitiveness in the digital marketplace.”

Marriott’s letter mirrored their overall publicity campaign for combining the two hoteliers, beginning with the revised proposal. In an infographic released shortly after the announcement, the Maryland-based hotelier illustrated the overall growth strategy for the two companies.

The hotels agreed to merge once again after Marriott increased their bid to $13.6 billion. Prior to that, Starwood was prepared to drop the Marriott takeover for an unsolicited bid by an investor group led by Anbang Insurance.

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