With Marriott massively increasing its offer to purchase Starwood, they’ve shared news of the deal with their employees.
This is what Marriott is saying about the revised offer to buy Starwood. They explain the price, that the Chinese insurer could still counter, and that the deal contains a $450 million breakup fee.
As you may have seen, we broke some exciting news this morning. Starwood’s board of directors decided that our revised bid, submitted over the weekend, is superior to the Anbang consortium offer and has accepted our new terms. You can read more here.
Here’s a quick overview of what changed about the deal through this process:
- Our revised bid values Starwood at $13.6 billion, or $79.53 a share. The exchange ratio was revised to 0.80 shares of Marriott common stock for each share of Starwood stock from 0.92 in the prior offer.
- We increased the cash paid per share of Starwood stock to $21.00 from $2.00.
- The deal is still a combination of stock and cash consisting of $10.0 billion of Marriott International stock based on the closing price of $73.16 on March 18, 2016 and $3.6 billion of cash.
Beyond the math, the strategic story hasn’t changed. The simple fact remains that the combination of Marriott and Starwood will create a premier lodging company that will offer broader choice for guests, greater benefits for owners and franchisees, more opportunities for associates and increased value for shareholders of both companies. Over the course of the last few months we’ve had an opportunity to learn even more about Starwood through our integration process and we believe that the benefits of combining both companies are even more compelling than our original expectations.
Now that Starwood’s Board has accepted our revised bid, we’ll continue the work of completing this transaction – work that includes obtaining shareholder approvals, the remaining regulatory consents and the satisfaction of other customary closing conditions. We have agreed to adjourn the dates of our shareholder meetings to April 8, 2016. Assuming we receive the necessary approvals, we continue to expect the transaction will close in mid-2016.
Could Anbang or others still attempt to make another bid for Starwood? Yes, because Starwood is a public company, that’s possible and is inherent in the transaction process, but no bids can be made or considered after Starwood’s shareholder vote takes place. We’ve made it clear to Starwood that this offer is aligned with the value we see in Starwood – particularly after months of due diligence through our integration process. The revised agreement includes a break-up fee of $450 million due to Marriott should Starwood ultimately decide to accept another bid. But our focus right now is on continuing the process of integration and completing the closing conditions, and we and Starwood believe this revised bid offers the best course for Starwood and Marriott shareholders.
As always, I have great confidence in our company and am as excited today as I have ever been about our future. We don’t get to this point without the tireless work of everyone at Marriott – thank you for your continued hard work and focus on serving our guests. At the end of the day, that is what it’s all about … delighting even more guests around the world.
President and CEO
Marriott International, Inc.