by Sarah J.F. Braley | March 28, 2016

Starwood Hotels & Resorts Worldwide, which has been in negotiations for five months to be purchased by Marriott International, today announced that its board of directors, in consultation with its legal and financial advisors, is considering an alternative bid from its rival suitor, a consortium consisting of Chinese investors including Anbang Insurance Group, J.C. Flowers & Co. and Primavera Capital Limited. The revised proposal, received March 26, has been determined to be "reasonably likely" to be a better deal than the current merger agreement with Marriott International.

In a statement concerning the new proposal, Marriott reaffirmed its commitment to acquire Starwood, expressing confidence that the current amended merger agreement is the best course for both companies. Last week, Starwood and Marriott renegotiated terms and signed a new purchase agreement. That deal increased the cash payout to Starwood shareholders by $21 to $79.53 per share, making their agreement worth $13.6 billion; adding in proceeds from a spin-off deal for Starwood's timeshare business, and the total for the transaction reaches $14.4 billion. 

Under the new terms, the consortium would acquire all of outstanding shares of Starwood common stock for $82.75 per share in cash, an increase of $4.75 per share from the consortium's original proposal, which was received March 18. The two parties are continuing to discuss other details related to the consortium's revised proposal.

According to a statement from Starwood, there is the possibility that discussions will not result in a binding proposal from the consortium, or that a transaction with the consortium will be approved or consummated on any particular terms or at all.

Both Starwood and Marriott have postponed stockholder meetings until April 8.