Marriott reviews options on Starwood acquisition following counter bid
Starwood received a counter offer for its business from the Chinese consortium, which includes Angbang Insurance Group, J.C. Flowers & Co. and Primavera Capital Limited on Friday (18 March).
The proposed Marriott/Starwood merger, announced at the end of last year, was set to create the world's largest hotel company, but Starwood's Board of Directors said due to the 'superior proposal' it intended to terminate the merger agreement and 'enter into a definitive agreement with the consortium'.
Under the terms of the merger agreement Marriott has until 11:59 pm on 28 March to counter offer. If Starwood does decide to terminate its merger agreement with Marriott and accept the consortium's proposal it will have to pay Marriott a termination fee of $400m.
Starwood said: "Starwood is not permitted to terminate the Marriott agreement to enter into the consortium’s binding agreement unless the Starwood Board has determined that the consortium’s offer continues to be a 'Superior Proposal' once the negotiation period with Marriott has concluded, and taking into account any revisions to the existing Marriott agreement that are proposed by Marriott during this period. The consortium has confirmed that its offer will remain outstanding until the expiration of Marriott’s negotiation period.
In a statement Marriott International said: "Marriott continues to believe that a combination of Marriott and Starwood is the best course for both companies and offers the best value to Starwood shareholders. Marriott is in the process of reviewing the Anbang consortium’s proposal and is carefully considering its alternatives. The company is considering postponing its Special Meeting of Stockholders which is currently scheduled for March 28, 2016. Marriott has no further public comment at this time."
