Chinese Investors Likely To Take Starwood, Wall Street Says

W Hotel Barcelona, photo courtesy: Marcus

Wall Street analysts are predicting Marriott International will not outbid a group of Chinese investors led by Anbang Insurance Group for control of Starwood Hotels & Resorts.

“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, reported the Associated Press.

Marriott is, instead, highlighting other benefits of its offer, including an expected approval from U.S. regulators. It’s unclear what regulatory hurdles the Chinese company will have to pass in order to go through with buying Starwood.

A consortium of Chinese-based investors outbid Marriott for the second time yesterday with a $15 billion offer, according to AP, for brands such as Sheraton, Westin, and W Hotels.

Even if Marriott decided to enter another round of bidding, it most likely would be fruitless. Analyst Whitney Stevenson of JMP Securities told Market Watch that “if [Marriott] does come back with another round of bidding, we believe the consortium has demonstrated its determination to get the deal done in an all-cash offer, and believe that it will prevail in a more drawn-out bidding war.”    

An Anbang-led purchase of Starwood would mark the largest takeover of a U.S. company by a Chinese investor. It already owns Manhattan’s landmark Waldorf Astoria, and is in a deal to acquire luxury-property owner Strategic Hotels & Resorts Inc.

Starwood will consider the proposals at a meeting scheduled for April 8. If it ends its merger agreement with Marriott, Starwood will owe Marriott $450 million in termination fees.