Who is Acquiring Starwood Hotels?

Latest Update – March 28, 2016 – China’s Anbang Insurance Group tops Marrott with an increased offer of approximately $14 Billion. It seems unlikely that Marriott will be able to match this most recent Anbang offer, but stay tuned for more!

Previously reported:

We heard a few months back that  Starwood Hotels & Resorts struck a deal to be acquired by Marriott International . The news of this deal left many in the points and miles world wondering what might happen to the beloved Starwood Preferred Guest loyalty program and the valuable Starpoints reward currency…

Current Developments:

Throwing a wrench in those plans is China’s Anbang Insurance Group, who presented Starwood with a better cash offer of $78 per share (about $13.2 billion), which Starwood accepted this past Friday, or so we thought…

Per the original agreement, Marriott had five business days (til March 28th) to respond with a counter offer (Marriott’s original offer was worth about $11.5 billion in cash and stock)…

BREAKING NEWS!

It turns out that Marriott did not need the full five days to come up with a counter-offer!

In BREAKING NEWS this morning, Starwood has accepted an improved offer from Marriott estimated at $13.6 billion (a cash plus stock offer)!

There were many (including myself) that were thinking (and hoping) that Marriott would not be able to counter the Anbang offer, but it seems that Marriott is not going to shy away from a little bidding war and is willing to do whatever it takes to secure the Starwood transaction.

Now back to wondering what will happen to the Starwood Preferred Guest loyalty program…

 

Though they currently have the inferior offer in this bidding war, some are still wondering – who is Anbang anyway?

If Anbang sounds unfamiliar to you, you are not alone, but they have been making a splash in the hotel industry by buying up some iconic hotel properties, including the purchase of New York’s Waldorf Astoria property for $1.95 billion in late 2014. Though the Waldorf Astoria was formerly the hotel of choice among US Presidents, as a result of the acquisition by the Chinese firm, the President of United States will be staying elsewhere (in a U.S. company-owned property) while visiting New York. In addition to the Waldorf purchase and the Starwood bid, Anbang has agreed to buy Strategic Hotels & Resorts from Blackstone for $6.5 billion.

So what does this all mean for the Starwood Preferred Guest program!?

While I am no expert on this specific transaction, my day job involves technical accounting related to large merger and acquisition transactions, so I’ll offer my input!

My experience has been that until a transaction closes and the funds have exchanged hands, ANYTHING can happen… including the seller accepting a better offer, and then subsequently accepting an even better offer, which is exactly what occurred this morning!

So while Marriott is currently back on top, I fully expect a counter offer by Anbang to come shortly…

My hope is that ultimately, no matter who acquires Starwood, the Starwood loyalty program remains in its current state. I think that the purchase by Anbang is much more likely to result in the fulfillment of that hope, while a deal with Marriott comes with more uncertainties for the Starwood Preferred Guest loyalty program.

Unfortunately, I am not on the Marriott Board of Directors, so I don’t know exactly how this will play out, but I am very intrigued, as are many in the travel community! 

And while this all shakes out in the next few days, I will be applying for the increased offer on the Starwood Preferred American Express card! Will you?

DW