Three Chinese firms competing for Starwood Hotels & Resorts
28 October 2015
Three Chinese firms are competing to bid for Starwood Hotels & Resorts Worldwide Inc, in a deal that would value the operator of the W and Sheraton Hotels at more than $12 billion.
China will then allow only one company to make an offer in order to avoid a bidding war among local firms.
A concluded deal would be the biggest-ever Chinese takeover of a US company after the country's sovereign-wealth fund China Investment Corp (CIC) acquired a 9.9 per cent stake in Morgan Stanley for $5.6 billion.
Shanghai Jin Jiang International Hotels (Group) Co, HNA Group, parent of Hainan Airlines, and CIC have submitted separate proposals to the Chinese government for approval.
Starwood, which has a market cap of $12.6 billion, has more than 1,200 properties world-wide with brands that include The Luxury Collection, W, Westin, Le Meridien, Sheraton, St. Regis, Aloft, and Element luxury hotels and resorts
The Connecticut-based company has sold properties worth about $1.5-billion over the past two years including its interest in Park Lane Hotel, London to Sir Richard Suttons Settled Estates.
In April, Starwood hired investment bank Lazard to help it explore strategic alternatives including a possible sale or merger.
Since then, the company sold a few hotel properties, and reportedly in advanced talks to sell its timeshare business for at least $1 billion.
Any deal involving Chinese companies would have to pass intense scrutiny of the Committee on Foreign Investment in the US, which generally vetoes such transactions.