Breaking news this morning — Starwood has accepted a bid of $78 cash per share by Chinese investor group Anbang, throwing a wrench into the Marriott – Starwood merger.
How could this be? Wasn’t a contract with Marriott already signed?
Yes, Marriott and Starwood had signed paperwork initiating a merger, but the contract left Starwood the chance to continue to negotiate other offers before the merger closed.
Marriott has five days to respond and is expected to, but it’s price was about $65/share which means it will need to justify nearly a 20% increase in price. I’m not sure that is practical for Marriott.
File this as developing, but I have a hunch this is good news from a loyalty prospective — Marriott would have assuredly “enhanced” the SPG into something far less valuable than it is now. Staying an independent chain will likely result in fewer cutbacks.