BETHESDA, MD - A Chinese banking and insurance firm has lost the fight for Starwood Hotels, leaving Marriott as the prospective new owner of the company that operates the Sheraton and Westin hotel chains.
According to Starwood Hotels & Resorts Worldwide, the Beijing-based company has withdrawn its nonbinding proposal to acquire all of the outstanding shares of common stock of Starwood for $82.75 per share in cash, citing market conditions. Apparently, the Chinese buyer does not have any intention of making another proposal.
Starwood's intended merger with Marriott International, which has been in negotiations for several months and which would pay Starwood shareholders $77.94 per share, making their agreement worth $13.3 billion, is being unanimously supported by Marriott's board of directors.Arne Sorenson, president and CEO of Marriott, said in a statement, "We are focused on maximizing shareholder value, and from the beginning of this process we have been steadfast in our belief that a combination with Starwood will offer the highest value to all shareholders. Our integration teams have been diligent in their work over the last few weeks and are more committed than ever to a timely and smooth transition."
Thomas B. Mangas, CEO of Starwood, added, "We are excited to be part of the world's largest hotel company with an unparalleled platform for global growth. The existing merger agreement provides substantial value to our stockholders through significant upfront cash consideration and long-term upside potential from projected shared synergies, including $250 million in cost synergies and significant revenue synergies, as well as ownership in one of the world's most respected companies."
Both Marriott and Starwood have scheduled stockholders' meetings for April 8 to vote on the merger.