Starwood shows intent to terminate Marriott merger

Starwood Hotels & Resorts Worldwide, Inc has said that the "fully financed proposal" from Anbang Insurance Group Co constitutes a "superior proposal".

In light of this, Starwood has notified Marriott that its board intends to terminate the Marriott merger agreement and enter into a definitive agreement with the Consortium (consisting of Anbang Insurance Group Co., Ltd., J.C. Flowers & Co. and Primavera Capital Limited).

Marriott has the right until 11:59 p.m. ET on March 28, 2016 to negotiate revisions to the existing merger agreement between Marriott and Starwood.

The Consortium hopes to acquire all of the outstanding shares of common stock of Starwood for US $78 per share in cash, an increase from the $76 per share proposal it made last week.

Starwood is not permitted to terminate the Marriott agreement to enter into the Consortium’s binding agreement unless the Starwood Board has determined that the Consortium’s offer continues to be a “superior proposal” once the negotiation period with Marriott has concluded, and taking into account any revisions to the existing Marriott agreement that are proposed by Marriott during this period.

If Starwood terminates the Marriott merger agreement in order to accept the consortium proposal, Starwood must pay Marriott a termination fee of $400 million in cash.

A statement by Marriott International stated that "Marriott continues to believe that a combination of Marriott and Starwood is the best course for both companies and offers the best value to Starwood shareholders".

The Consortium has confirmed that its offer will remain outstanding until the expiration of Marriott’s negotiation period.

Starwood’s Board has not changed its recommendation in support of Starwood’s merger with Marriott.