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Starwood Reverses Course, Agrees to Marriott Revised Offer

Revised offer values Starwood at $13.6 billion, improving upon previous bid by Anbang-led group.

Starwood Hotels and Resorts has once again changed their planned course of action, favoring a revised plan by Marriott International over an unsolicited bid by a group of investors led by Anbang Insurance. In joint press releases, the companies detailed the new proposal that values Starwood at $13.6 billion.

Under the revised plan, Marriott will pay $21 in cash per Starwood share, while also granting shareholders .8 shares of Marriot International Class A stock for each Starwood share held. As a result, current Starwood shareholders will control nearly one-third of the new company.

“The revised agreement offers superior value for Starwood’s shareholders, the ability to close quickly, and provides value creation potential that will allow both sets of shareholders to benefit from improved financial performance,” the press release read. “Marriott and Starwood have already obtained the important regulatory consents necessary to complete the transaction, including clearing pre-merger antitrust reviews in the United States and Canada.”

The new plan is the second time Starwood has reversed course from their original plan of merging with Marriott to begin with. Last week, the international hotelier was prepared to abandon the hotel giants’ plan in favor of an unsolicited bid lead by China’s Anbang Insurance. The plan was not endorsed by the Starwood board of directors and Marriott reserved the option to submit a counter-offer to what Starwood then called a “superior proposal.”

“Throughout this process, our board of directors has remained laser-focused on maximizing value for Starwood shareholders,” said Bruce Duncan, chairman of the board at Starwood Hotels. “Marriott’s revised offer provides the highest value for our shareholders through long-term upside potential from shared synergies and ownership in one of the world’s most respected companies.”

Both companies’ boards will consider the revised merger at simultaneous stockholder meetings on March 28. If the merger is approved by both Starwood and Marriott, the merge is expected to close before the end of the year.

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