On Friday, March 11, Starwood Hotels and Resorts received an unsolicited acquisition proposal from a consortium of investors led by Anbang Insurance Group. In the nonbinding proposal, the consortium offered to acquire all outstanding shares of Starwood stock for $76 per share in cash. Starwood agreed in November to an acquisition by Marriott, and that deal is on track to close in mid-2016; Marriott has issued a waiver allowing Starwood to engage in discussions with the consortium through March 17.
The Starwood board of directors hasn't changed its recommendation in support of the Marriott merger, but maintains it will carefully consider discussions this week with the consortium. Both Starwood and Marriott had scheduled their respective stockholder votes on the merger for March 28.
According to a statement from Starwood, there are a number of matters that would need to be resolved in the new proposal, and there would be no guarantee that after completing due diligence that the consortium would offer a binding acquisition proposal. The Marriott deal has a current value of $63.74 per share, based on Marriott stock volume weighted average price as of Friday. Starwood shareholders also would get approximately $5.50 per share based on Starwood's timeshare business spinoff, as they also would under the consortium's proposal.
Marriott, for its part, today reaffirmed its commitment to the Starwood acquisition, noting the deal and projected closing time still are on track, but that it will monitor this week's developments. Should Starwood pull out of the deal or change its recommendation to stockholders, the company would be obligated to pay Marriott a $400 million termination fee in cash.
Starwood won't comment any further on the new proposal before the waiver period ends March 17, the company said in a statement.