Starwood receives unsolicited acquisition proposal

Despite entering into a merger agreement with Marriott in November, the company announced this week that on March 10, 2016 it received a non-binding proposal from a consortium of companies wishing to acquire all outstanding shares of common stock of Starwood for $76.00 per share in cash.

Starwood has received a waiver from Marriott enabling it to engage in discussions with, and provide diligence information to, the consortium in connection with its proposal. Starwood commenced discussions with the consortium on March 11, 2016. The Marriott waiver expires at 11:59 pm Eastern Time on March 17, 2016.

Starwood said it does not intend to comment further on its discussions with the consortium prior to the expiration of the waiver period today.

While Marriott’s offer would mean creating the world’s biggest hotel company, this new offer has a cash advantage that may appeal to investors.

Leading the new proposal is Chinese investment firm Anbang Insurance Group, J.C. Flowers & Co., and Primavera Capital Group among others.

Under the terms of the merger agreement with Marriott, at closing, 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. The total consideration to be paid by Marriott, excluding debt assumed, totals $10.8 billion, consisting of $10.5 billion of Marriott common stock, based on the 20-day VWAP of Marriott common stock ending on March 11, 2016, and $339 million of cash, based on approximately 170 million fully diluted Starwood shares outstanding at February 19, 2016.

Starwood’s board of directors has not changed its recommendation in support of Starwood’s merger with Marriott. There can be no assurance that discussions will result in a binding proposal from the consortium or that a transaction with the consortium will be approved or consummated.

accomnews will keep you updated as this story develops.


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