Starwood’s new 8-K filing with the SEC walks through the timeline of Anbang’s attempt to top Marriott’s offer to acquire the chain. (HT: Skift)

I believe Anbang’s $78 offer for Starwood was likely better than Marriott’s offer of 0.8 shares and $21. While worth just over $79 at the time the offer was made, the Marriott deal is worth closer to $75 today. The only real benefit of the revised Marriott offer to Starwood’s shareholders is the possibility of tax deferment.

Al Maha Desert Resort

However Starwood’s board disagreed (and the near-doubling of Starwood officers’ golden parachutes in the second Marriott deal surely had nothing to do with it). Then:

• Anbang countered at $81 and an offer to cover the full $450 million breakup fee of the Marriott deal, plus the reimbursement of up to $18 million in Marriott expenses. (The $78 deal had Anbang covering only half the then-$400 million breakup fee.)

• Anbang then agreed to increase their offer to $82 and then $82.75.

• Oddly, on Tuesday, Anbang suggested they were considering raising their bid further and needed a couple more days to finalize.

• Then on Thursday they backed out.

W Doha

We can only speculate why Anbang — which had demonstrated the full ability to buy Starwood at $78, and which Starwood believed would do so again at $82.75 — backed out of the deal. Having pursued Starwood for nearly a year, they were serious. Their $78 proposal was binding and fully financed. They countered Marriott. So my own guess is that Anbang was told to back out by the Chinese government, at high enough levels to Anbang’s well-connected Chairman.

Whether the concern was the amount of foreign currency that would be leaving China, the scrutiny that the otherwise-opaque Anbang would receive, or something else though is difficult to know.