Starwood Hotels & Resorts said Thursday that a consortium
led by Anbang Insurance Group withdrew its all-cash $14.1 billion offer for the
company, and that Starwood's board continues to support its buyout agreement
with Marriott International.
The Anbang group, which also includes J.C. Flowers
& Co. and Primavera Capital Ltd., withdrew its nonbinding bid of $82.75 per
Starwood share “as a result of market considerations," clearing the way
for Marriott to buy Starwood (whose brands include Westin, Le Meridien, St. Regis, Sheraton, W and Aloft) and become by far the world’s largest hotel company.
“We continue to be very excited about the combination
of our two companies and are committed to completing this deal in an
expeditious manner,” said Starwood Chairman Bruce Duncan in a statement. “We
are confident Starwood stockholders will support a merger that will create the
world’s best and biggest hotel company and which offers significant long-term
upside for not only our stockholders, but also our company and
associates."
Marriott’s most recent buyout agreement, announced
March 21, calls for Starwood shareholders to receive $21 in cash and 0.80
shares of Marriott Class A common stock for each share of Starwood common
stock. At $77.94 per Starwood share, that values the buyout at about $13.3
billion. The agreement was previously estimated at $13.6 billion because of
Marriott’s higher stock price at the time.
Both Marriott and Starwood will hold shareholder
meetings on April 8 to vote on approving the buyout.
“Together, we can provide opportunities for
significant equity upside and great long-term value driven by a larger global
footprint, wider choice of brands for consumers, substantial synergies, and
improved economics to owners and franchisees leading to accelerated global growth
and continued strong returns,” Marriott CEO Arne Sorenson said in a statement.
“Our integration teams have been diligent in their work over the last few weeks
and are more committed than ever to a timely and smooth transition.”
Starwood said on March 28 that the Anbang-led group boosted
its all-cash bid to $82.75 a share, or about $14.1 billion. Starwood maintained
on Monday that that its board hadn’t changed its recommendation to support the
Marriott agreement.
By acquiring Starwood, Marriott would oversee a
company with 30 brands and almost 5,700 hotels worldwide.
Starwood shares were down more than 4% in after-hours
trading on Friday to $79.80. Marriott shares were down about 6% in extended
trading to $67.