Everything You Need To Know About The Anbang-Marriott-Starwood Bidding War
After a month-long bidding war (or more like a soap opera...) between Anbang and Marriott over Starwood Hotels and Resorts, Marriott surprisingly emerged the victor—even though Anbang put up the "superior proposals," before ultimately withdrawing last week.
As Marriott moves forward its their bid to create the largest hotel chain in the world (and the rest of us try to figure out what happened with Anbang), here's a step-by-step breakdown of one of the biggest bidding wars in recent memory.
Marriott's Original Super-Secret Offer
The Starwood saga started back in November, when Marriott took the hotel industry by surprise with a $12.2B offer in a bid to create the world's largest hotel chain.
The offer came amid its own bidding war, with rumors of Chinese companies, Hyatt Hotels and even InterContinental Hotels all vying for Starwood Hotels.
When Marriott finally came out with the offer, CEO Arne Sorensen (pictured) said they kept it under wraps for seven months as the company laid the groundwork—the hotel giant even went to the lengths of confidentiality pledges by some employees to keep them under the radar.
Anbang's First Try
After over half a year of hard work, Marriott seemed to have it all in the bag—until March rolled around, and Anbang Insurance got involved with its own unsolicited $13.2B takeover bid.
The Chinese-based insurance company was best known for its $1.95B Waldorf Astoria buy from Blackstone, but Anbang went on quite a spending spree in March, starting with its $6.5B buyout of Strategic Hotels and Resorts (also from Blackstone).
Starwood Accepts Anbang's Bid
Despite Anbang's offer coming unsolicited, Starwood's shareholders deemed their eastern suitors worthy, calling Anbang's offer a "superior proposal" and set its sights on ditching Marriott.
Anbang's bold moves had been building on massive M&A momentum out of China in recent months, with Chinese purchases in the US on a record-setting pace for the first part of 2016.
Not to be outdone, Marriott came back with a $13.6B offer, setting the deal back on course. However, experts remained skeptical, telling Bloomberg that Anbang might not be beaten so easily, as company chairman Wu Xiaohui has a history of last-minute heroics.
“I have to believe there is at least one more act to this play,” said Frank Aquila, a partner in mergers and acquisitions at law firm Sullivan & Cromwell in New York.
Anbang's Knockout—And Surrender?
Just as suspected, the Anbang wasn't outdone by a "paltry" $13.6B—the Chinese insurer came back with its own $14B bid.
With its Chinese government backing, Anbang had a serious advantage over Marriott in their battle for Starwood, as the latter's offers were based solely on stock prices—meaning the hotel chain's cash was limited.
But just when all of Marriott's hope seemed lost, Anbang oddly walked away, citing "market considerations." Its withdrawal was about as cryptic as its ownership—but no doubt Marriott's Arne Sorenson can rest easier now.