China's Anbang drops bid for Starwood Hotels, Marriot emerges winner in bidding war
01 April 2016
China's Anbang Insurance Group Co said yesterday that it had abandoned its bid for Starwood Hotels & Resorts Worldwide Inc, clearing the way for Marriott International Inc's acquisition of the Sheraton and Westin hotels operator.
The abrupt withdrawal ended a bidding war between Marriott, which sought to create the world's largest lodging company and Anbang, which aimed to create a vast portfolio of US real estate assets.
"We were attracted to the opportunity presented by Starwood because of its high-quality, leading global hotel brands, which met many of our acquisition criteria, including the ability to generate consistent, long-term returns over time," Anbang said in a statement.
"However, due to various market considerations, the consortium has determined not to proceed further," Anbang added, referring to the joint bid it had put together with private equity firms JC Flowers & Co and Primavera Capital Ltd.
Anbang offered no reason to Starwood for walking away after it raised its offer of 26 March, Reuters reported citing people familiar with the matter wished to remain unidentified due to the confidential nature of the discussions.
Starwood said on Monday that Anbang had increased its offer to almost $14 billion and had been expected to follow through on the non-binding offer so that Starwood would formally declare it superior to Marriott's.
Meanwhile, Starwood said in a statement on yesterday that it had still managed to extract more money for the company's investors and looked forward to combining with Marriott.
''Throughout this process, we have been focused on maximizing stockholder value now and in the future,'' Bruce Duncan, Starwood's chairman, said. ''Our board is confident this transaction offers superior value for Starwood's stockholders, can close quickly and provides value-creation potential that will enable both sets of stockholders to benefit from future financial performance.''
Shares in Starwood were down over 4 per cent in after-hours trading after Anbang's disclosure, to $79.92, while Mariott shares were down 5 per cent, to $67.61.