Market Overview

Watch Hotel Sector Following News Of New Bid For Starwood

Watch Hotel Sector Following News Of New Bid For Starwood

Shares of Starwood Hotels & Resorts Worldwide Inc (NYSE: HOT) were up more than 8 percent in the pre-market hours Monday after the company said it received a rival bid from China' Anbang Insurance Group, potentially creating a roadblock for Marriott International Inc (NASDAQ: MAR), which already has been in M&A talks with Starwood and would become the world's largest hotel company if it were to acquire Starwood.

Late last year, Starwood agreed to be acquired by Marriott for about $12.2 billion. The bid from Anbang values the owner of Sheraton and St. Regis hotels for around $14 billion.

Related Link: Starwood Hotels Confirms $76/Share Unsolicited Cash Bid From Consortium

The offer from the Anbang includes $76 per Starwood share in cash and Interval Leisure Group stock, valued at this time around $5.50 per Starwood share.

Marriott reaffirmed its commitment to the Starwood deal and "is confident that the previously announced merger agreement is the best course for both companies."

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

Meanwhile, both companies have satisfied the merger closing conditions relating to the antitrust and competition authorities in the United States and Canada. Marriott has scheduled its special meeting of stockholders for March 28, 2016, for approval of the Starwood merger. Marriott expects that the Starwood merger will be completed by mid-year 2016.

Starwood would have to pay a termination fee of $400 million to Marriott if it were to decide to be acquired by Anbang or any other rival bidder.

Shares of hotel companies may see activity over the news of a new bidder for Starwood.

At Time Of Writing...

  • Marriott was up 2.05 percent at $70.31.
  • Starwood was up 7.02 percent at $75.36.
  • Hilton Worldwide Holdings Inc (NYSE: HLT) was up 0.56 percent at $21.26.
  • Hyatt Hotels Corporation (NYSE: H) was up 2.79 percent at $48.55.
  • Interval Leisure Group, Inc. (NASDAQ: IILG) was down 5.67 percent at $13.30.

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