Starwood Hotels and Resorts has received a $12.8bn (£8.9bn) takeover offer from a group led by China’s Anbang Insurance Group, potentially throwing a spanner in the works for the tie up between Starwood and Marriott agreed last November.
The terms of the deal with Marriott includes a period during which Starwood can consider other offers and expires at the end of the day on 17 March, with shareholders from both companies due to vote on the deal on 28 March.
Marriott has today defended its offer, saying it remains committed to the deal and gently reminds Starwood it would "be obligated to pay Marriott a $400m termination fee in cash" if it called off the deal.
The new offer from the Anbang led consortium would pay $76 a share in cash for all shares outstanding of the company, a 7.9 per cent premium to Starwood’s stock price as of Friday’s close at $70.42.
Shares of Starwood rose 8.4 per cent to $76.35 in pre-market trading. Marriott shares rose 1.6 per cent to $70.
Starwood released a statement that said:
Starwood will carefully consider the outcome of its discussions with the consortium in order to determine the course of action that is in the best interest of Starwood and its stockholders
The move is the latest bid on Anbang's hotel shopping spree.
Just last week Anbang paid out $6.5bn to acquire Strategic Hotels & Resorts and bought the Waldorf Astoria for almost $2bn in late 2014 from Hilton.
In recent years other Asian buyers, who see US real estate as a safe haven for funds, have acquired New York’s Plaza Hotel and Carlyle Hotel each for more than $1.4m a room.