Bethesda-based Marriott International Inc. may lose its bid to become the world's biggest hotel operator after a Chinese company increased its offer for Starwood Hotels & Resorts Worldwide Inc. to more than $14 billion.
According to Starwood, Anbang's new all-cash bid "is reasonably likely to lead to a 'superior proposal' " to Marriott's most recent $13.6 billion cash-and-stock offer for the parent company of Sheraton, St. Regis and W Hotels.
Anbang blitz into the U.S. real estate market has repeatedly knocked askew the ambitions of Marriott, which has been attempting to add Starwood's posh stable of hotels to its portfolio since last year.
Marriott bid $12.2 billion for the Greenwich, Conn., hotel in November and most had expected that Marriott would become the biggest hotel in the world when it completed the deal.
But few had realized the ambition, or motivation, of Anbang, even though it had made a big splash in the U.S. real estate market just two years ago when it acquired the famed Waldorf Astoria of York for almost $2 billion.
Anbang is thought to be interested in acquiring Starwood to diversify its foreign assets, amid China's continued economic slowdown. Many Chinese companies are attempting to do the same: This year, Chinese firms have already agreed to more than $100 billion in foreign deals, compared to the $106 billion exchanged throughout all of last year.
Some industry analysts now believe Marriott will wind up on the losing end of this battle unless other factors besides price enter the equation.
"We don't think (Marriott) can go higher, and we would question it if they did," Canaccord analyst Ryan Meliker wrote in a research note.
Starwood's board said it is still backing Marriot's bid while it assesses Anbang's offer.
Marriott stood behind its last bid "as the best course" for Starwood in a Monday letter. The Bethesda, Maryland, company also advised Starwood shareholders to scrutinize Anbang's financing and consider the "timing of any required regulatory approvals."
Marriott is hoping to build a hospitality empire by adding Starwood's posh hotels to its line-up. Marriott initially bid $12.2 billion for Starwood last November in a deal that would make it the world's biggest hotel company. Marriott CEO Arne Sorenson also promised to create the industry's best customer rewards program.
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