Loving these headlines! As a very loyal Starwood Platinum member, I’ve been hoping that this deal would fall apart since day one. Friday presented the very first bit of hope towards that cause (see – Breaking: Starwood To Terminate Marriott Deal, “Superior” Offer from Chinese Insurer Anbang!), though Marriott has until March 28th to submit a counter offer. Reading through some recent articles, it seems that many feel that Marriott may have already lost the deal!
Marriott International Inc. will probably lose Starwood Hotels & Resorts Worldwide Inc. to a group led by China’s Anbang Insurance Group Co. because it avoids overpaying for assets, according to analysts including Robert W. Baird & Co.’s David Loeb. “While we expect Marriott to counter the consortium’s proposal, we believe Marriott will remain disciplined, and it appears increasingly likely, in our opinion, that Starwood will be acquired by the consortium.”
Assume that Marriott might need to offer at least $80 a share to persuade Starwood to dump Anbang and friends, and the numbers get worse. At that price, Marriott would be paying a $2.9 billion premium over Starwood’s undisturbed value. It would have to generate nearly three times the original deal’s cost savings to make the merger math stack up. And Marriott’s mostly stock deal would be competing with Anbang’s cash. On the other hand, with a $400 million check as payment for the Starwood deal disruption, Marriott would have a nice down payment to go on the hunt for some boutique brands to bolster its portfolio instead.
Though Marriott is expected to make a counter offer, according to news reports. Cramer said he doesn’t think Marriott will win the bid for Starwood. ‘I think you can’t beat Anbang because Anbang is the Communist party – they want their property and they have the money to get it.’
- More About the Chinese Firm Bidding for Starwood Against Marriott, Recent Deal for Four Seasons, Ritz, and JW Properties
- Starwood Receives Waiver from Marriott to Evaluate Rival Bid from Chinese Group!
- New York’s Plaza Hotel Up for Sale in Foreclosure Auction