Marriott wins over Starwood with bid worth $14.4 billion
CINDY ELLEN RUSSELL / CRUSSELL@STARADVERTISER.COM
The Royal Hawaiian, a Luxury Collection Resort and, to its left, the Sheraton Waikiki. Starwood today accepted a bid from Marriott worth more than $14.4 billion just days after a Chinese insurance company appeared to steal it away from the hotel chain with a more lucrative offer.
NEW YORK » Marriott won over Starwood with a sweetened bid worth more than $14.4 billion just days after a Chinese insurance company appeared to steal it away from the hotel chain with a more lucrative offer.
The buyout, which may still be contested by China’s Anbang, would create the world’s biggest hotel company and give Marriott a stable of tony properties run by Starwood, like the St. Regis New York.
Starwood, which owns Sheraton, Westin and St. Regis, over the weekend became the first U.S. hotel operator to gain access to Cuba, a day before the arrival of President Barack Obama. It is the first visit to Cuba by a sitting president in almost 90 years as relations between the two nations thaw.
The revised deal would give Starwood shareholders $21 in cash and 0.80 shares of Marriott International Inc. Class A stock for each Starwood share. Starwood shareholders are also expected to get Interval Leisure Group stock valued at $5.83 per share. Taken together, that would value Starwood stock at $85.36 per share, or about $14.41 billion.
Marriott has more than 4,400 properties in 87 countries and territories, under brands such as Ritz-Carlton, Residence Inn and Marriott. Starwood has nearly 1,300 properties in about 100 countries.
Just days ago, Anbang put up an offer of $83.83 for each Starwood share, or approximately $14.15 billion. Starwood stockholders would have received $78 in cash for each share they own plus $5.67 in stock for a spinoff of a vacation business.
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Anbang made a dramatic entry into the U.S. two years ago when it bought the famed Waldorf Astoria of New York for almost $2 billion. Days before it contested Marriott for control of Starwood, it laid down $6.5 billion to acquire Strategic Hotels & Resorts Inc., which owns several high-end properties including the JW Marriott Essex House in New York and Hotel Del Coronado in San Diego.
Starwood, based in Stamford, Connecticut, offered a unique opportunity for Marriott because the hotel chain put itself up for sale. Marriott said today that it is confident that it can achieve $250 million in annual cost savings within two years of closing on the Starwood transaction. That’s $50 million more than in estimated in November, when it gave its initial offer to Starwood.
Marriott and Starwood still anticipate the deal closing around midyear, assuming it receives the necessary approvals. Anbang, or any other suitor, has until April 8 to top Marriott’s bid.
Shares of Starwood gained $3.68, or 4.6 percent, to $84.25 before the market open. Shares of Marriott, based in Bethesda, Maryland, shed 51 cents to $72.65.
11 responses to “Marriott wins over Starwood with bid worth $14.4 billion”
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You know that 250m is gonna come from less maid service, more work for same pay. As usual the bottom gets shafted and the customer will end up paying more for less…
Mike, true, but it, like most companies–look at the strikes here in Waikiki at the Hilton and the Pacific Beach–have to deal with the unions. The thing that red flags me, is the high leveraging–as long as everything goes smoothly–a little uncertainty and the dominoes start doing their thing.
Well, there goes competition. Say hello to higher prices and fewer visitors.
Less competition may be good for Hawaii as the chain can fix rates easier as long as tourists keep coming. But not good to travelers in general, especially in small towns with concentration of these two chains.
These high prices just mean we will be paying more money to stay at these hotels, doesn’t it?
We have a bit of a problem with all these consolidations, taking away competition, don’t we. Seems to be happening everywhere.
Everyone already gave way to THE MEDIA..; you really only have, at the most–3 voices and ONE MIND…
..pocket change…
There are both Starwoods and Marriots in Hawaii. I hope they continue to accommodate Perry and Price.
If I find a Book of Mormon in the bedside drawer at my favorite hotel, the St. Regis in New York, it will be the end of my long relationship with Starwood hotels (where I and my business associates have booked thousands of hotel stays over the last two decades). That includes Sheratons, Westins, W hotels, and all other properties that Marriott owns or acquires. Public accommodations must remain secular.
No worry, do you get hu-hu when you see the Bible in the room?
The Chinese bought 4 hotels in Arizona (Florence AZ, Holiday Inn Express becoming a Green Tree Inn very soon…….Google them……..2,500 properties in China/USA.
“Public?” What is public about a Starwood Hotel?