|Photo by Freeimages.com/Wing Sing Chan|
And just like that, it's over.
The consortium led by China's Anbang Insurance is withdrawing its bid to take over Starwood Hotels and Resorts. As such, Starwood has released a statement reaffirming its commitment to merge with Marriott International, as originally planned in November.
"Throughout this process, we have been focused on maximizing stockholder value now and in the future," Bruce Duncan, chairman of Starwood’s Board, said in a statement. "Our Board is confident this transaction offers superior value for Starwood’s stockholders, can close quickly, and provides value-creation potential that will enable both sets of stockholders to benefit from future financial performance."
“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,” CEO Thomas Mangas added.
Just a little over two weeks ago, the consortium, which also includes J.C. Flowers & Co and Primavera Capital Limited, announced an unsolicited all-cash bid of nearly $13 billion for Starwood worth $76 a share, a significant increase over the offer made by Marriott in November ($63.74 per share).
After a week of consideration, Starwood opted to go with Anbang, and announced plans to to terminate the Marriott merger agreement and enter into a definitive agreement with the Consortium. Over the following weekend, Marriott upped its bid to $13.6-billion, and Starwood accepted the offer.
What's next? In a separate statement both Marriott International and Starwood encouraged shareholders to vote in support of the proposed merger. The two companies will hold their respective shareholder meetings April 8.