Anbang raises stakes with $14bn move in US hotels fight

Anbang has fired a new shot in the fiercest bidding war dealmakers have seen in recent years, raising its bid for Starwood Hotels & Resorts to $14bn in its latest effort to trump a rival

offer from Marriott International.

Starwood said yesterday it was in talks with the Chinese insurer after the acquisitive group sweetened its allcash offer to $82.75 per share, a nonbinding proposal the US hotel operator said it was likely to consider superior to Marriott’s offer.

But Starwood which owns the Sheraton, W Hotels and Westin brands stressed that its board was still backing a merger with Marriott. Starwood is reluctant to accept Anbang’s offer

amid Chinese media reports that Anbang’s US deals are at risk of being blocked by local regulators.

The battle is a highstakes faceoff for the two bidders. Anbang’s offer is the biggest potential US takeover by a Chinese company and would transform it into one of the world’s leading

hotel groups. It this month agreed a $6.5bn acquisition of 16 luxury US hotel properties from private equity group Blackstone. It paid almost $2bn for New York’s Waldorf Astoria in

2014.

For Marriott, a deal with Starwood would turn it into the world’s largest hotel operator with a portfolio of 1.1m rooms in more than 5,500 hotels. With greater size it would be better

placed to fend off competition from online intermediaries such as Google and Expedia.

The new Anbang bid is $4.75 per share higher than the one it made on March 18 and tops Marriott’s latest cashandstock offer, which was worth $78.12 at yesterday morning’s share price.

The US group first agreed to acquire Starwood for $12.2bn back in November but increased its cash and stock bid to $13.6bn last week in response to Anbang’s pursuit.

Caixin, a respected nonstate controlled Chinese financial magazine, reported last week that the China Insurance Regulatory Commission could block the deal under a rule that

prevents insurance groups from investing more than 15 per cent of total assets abroad.

People close to the Chinese company said the report overstated the risk that the watchdog would block the deal. Another person said Anbang had finance in place to close it.

However, Anbang, which is bidding for Starwood with China’s Primavera Capital and US private equity group JC Flowers, has yet to disclose how it plans to finance the transaction.

It is unclear whether Marriott will make a counteroffer.

After Anbang crashed the deal few analysts believed the US hotel operator would top the Chinese bid. However, while accompanying US President Barack Obama on his trip to Havana on March 21, Arne Sorenson, Marriott’s chief executive, and Thomas Mangas, his Starwood counterpart, hammered out the terms of a fresh deal that beat Anbang’s bid.

James FontanellaKhan New York