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!
Bloomberg’s – “Marriott, a Value Investor, Seen Losing Starwood to Anbang Group”
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.”
The New York Times – “Time for Marriott to Say Farewell to Starwood Deal”
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.
The Street: “Jim Cramer: Anbang Is Going to Win Starwood”
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.’
Related:
- 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
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5 comments
I feel a bit unpatriotic by supporting a foreign investor but, being a loyal Starwood member for 10+ years, the Anbang offer was the best way of preserving what has made the Preferred Guest program as great as it is.
I think the Chinese company will devalue the program more than Marriott would have. I could be wrong but we will see.
I’m no math genius, but $80 counter bid would still be lower than the current share price of $80.57. Why would anyone buy Starwood shares at $80.57 unless you expect a counter bid quite a big higher than $80.57, perhaps $85?
You people are so funny! Anbang has a history of shaking up all the companies it buys. Just because Marriott doesn’t buy them you think your points are safe? So foolish! The SPG program is the most generous in the industry because Starwood as a company is a dog – a dog with fleas. It has nice properties it overpaid for, don’t operate efficiently and are not monetizing well. Yes, they have cool tech and the guests are ripping them off with overly generous benefits but the Chinese will end this and get back to making it the money making machines they need it to be. Bottom line in one year you will wish…no…BEG Marriott to buy these guys.
[…] big news, of course, is that Marriott is buying Starwood. No they’re not. Yes they are. As Marriott and Anbang fight over Starwood, we’re left on the sidelines […]