Starwood gets higher $13bn offer from Anbang, tops Marriott offerStaff writer ▼ | March 18, 2016
Starwood Hotels & Resorts Worldwide received a revised proposal from a consortium of Anbang Insurance Group, J.C. Flowers & Co. and Primavera Capital, that the Starwood board has determined as a superior proposal compared to Marriott International.
Acquisition $78 per share in cash
Under the terms of the Consortium’s proposal, which contains definitive documentation, the Consortium would acquire all of the outstanding shares of common stock of Starwood for $78 per share in cash, an increase from the $76 per share proposal made by the Consortium on March 10, 2016.
Pursuant to separate agreements entered into by Starwood, Starwood stockholders would additionally receive consideration in the form of Interval Leisure Group (ILG) common stock from the previously announced spin-off of its vacation ownership business, Vistana Signature Experiences, and subsequent merger with ILG, currently valued at approximately $5.67 per Starwood share, based on the 20-day VWAP (volume weighted average price) of ILG common stock ending March 17, 2016.
On this basis, the Consortium proposal and the ILG transaction have a current value of $83.67 per share. The Starwood Board believes that the binding and fully financed proposal from the Consortium provides a high degree of closing certainty.
Under the terms of the merger agreement with Marriott, Starwood stockholders would receive 0.92 shares of Marriott International, Inc. Class A common stock and $2.00 in cash for each share of Starwood common stock.
Based on Marriott’s 20-day VWAP ending March 17, 2016, the merger transaction has a current value of $65.33 per Starwood share, including the $2.00 cash per share consideration.
Starwood stockholders will separately receive consideration from the spin-off of the Starwood timeshare business and subsequent merger with ILG of approximately $5.67 per Starwood share, based on the 20-day VWAP of ILG common stock ending March 17, 2016.
On that basis, the merger with Marriott and the ILG transaction have a current value of $71.00 per share.
On March 18, 2016, Starwood notified Marriott that Starwood had received the binding proposal from the Consortium that Starwood’s Board has determined that the Consortium’s proposal constitutes a “Superior Proposal” and that Starwood’s Board intends to terminate the Marriott merger agreement and enter into a definitive agreement with the Consortium.
Consistent with the terms of the Marriott merger agreement, Marriott has the right until 11:59 p.m. ET on March 28, 2016 to negotiate revisions to the existing merger agreement between Marriott and Starwood so that the proposal from the Consortium no longer constitutes a “Superior Proposal”.
Starwood will negotiate in good faith with Marriott during this period, and the Starwood Board will consider in good faith any changes to the Marriott agreement that Marriott may propose during this period. ■