Starwood timeline: From strategic review to bidding war
 
Starwood timeline: From strategic review to bidding war
01 APRIL 2016 8:52 AM

Starwood Hotels & Resorts Worldwide has been busy since the start of 2015. Here’s a look at the highlights of Starwood in the news.

GLOBAL REPORT—Since Starwood Hotels & Resorts Worldwide announced plans last year to undergo a strategic review, the company has seen its CEO resign; an interim CEO take the reins; another CEO step into office; and a bidding war for the company ensue, among other events.

Here’s what you need to know about the process so far. HNN will continue to update this timeline as developments occur.

31 March 2016 – The consortium led by Beijing-based Anbang Insurance Group informs Starwood Hotels & Resorts Worldwide that it intends to end its pursuit of acquiring the hotel company, according to a Starwood news release. With Anbang’s all-cash bid of $82.75 per share off the table, Starwood executives announce they support shareholders’ approval of Marriott International’s 21 March revised merger agreement. The $13.3-billion Marriott deal, which consists of $9.7 billion in Marriott stock and $3.6 billion in cash, will be the subject of a vote by shareholders on 8 April. In a separate release, Marriott and Starwood executives encourage shareholders to support the deal.

28 March 2016 – The Anbang consortium increases its offer to acquire Starwood with an all-cash bid valued at $82.75 in cash per Starwood share (for a total of approximately $14 billion). Anbang’s new proposal tops the most recent bid from Marriott International –$13.6 billion—but is not a binding offer.

Marriott’s news release on the latest Anbang deal casts doubt on its viability.

“Starwood stockholders should give serious consideration to the question of whether the Anbang-led consortium will be able to close the proposed transaction, with a particular focus on the certainty of the consortium's financing and the timing of any required regulatory approvals,” the statement said.

21 March 2016 – In response to the bid from the Anbang consortium, Marriott increases its bid for Starwood to a $13.6-billion revised merger agreement, which includes $3.6 billion in cash and $10 billion in Marriott stock. The per-stock price carries a value of $79.53 per share, which is an increase over Marriott’s original $12.2-billion deal ($65.33 per share) and Anbang’s all-cash offer of $78 per share. The new deal also increases Starwood’s break-up fee payable to Marriott from $400 million to $450 million.

The same day, Starwood announces the signing of three hotels in Havana, the capital of Cuba, in a landmark deal for U.S. hotel companies, which haven’t signed a deal in the country since 1959.

18 March 2016 – Starwood announces it has terminated its agreement with Marriott after receiving a higher all-cash bid from the Anbang consortium. Starwood executives said in the release that the Anbang offer—at $78 per share and more than Anbang’s 14 March bid—was a “superior proposal” to Marriott’s offer that was announced 16 November. Anbang’s bid included the value of Interval Leisure Group shares, which increased the offer’s per-share price to $83.67.

14 March 2016 – The Anbang-led consortium emerges and submits an unsolicited offer to acquire Starwood with an all-cash bid to buy all outstanding shares of Starwood common stock at $76 per share. The day Anbang throws its hat in the ring for Starwood, multiple media agencies report that Blackstone Group intends to sell Strategic Hotel & Resorts to Anbang.

22 December 2015 – Marriott files its S-4 filing with the U.S. Securities Exchange Commission, detailing its plan to acquire Starwood.

The filing’s highlights include hints that at least 11 companies expressed interest in Starwood, several submitted serious offers and Marriott dropped out of the bidding twice before re-entering the race late and emerging as the top bidder.

(Photo illustration: Jon Edwards)

15 December 2015 – Former Starwood CFO Thomas Mangas is chosen to replace interim CEO Adam Aron, effective 31 December. Mangas takes over as president and CEO about a month after the Marriott/Starwood deal is announced.

16 November 2015 – Marriott and Starwood executives make the first public announcement about Marriott’s intent to acquire Starwood. The $12.2-billion deal includes $11.9 billion of Marriott stock and $340 million in cash to pay for 170 million outstanding shares of Starwood stock. The highlights of the merger include the combined entity’s 1.1 million rooms in more than 5,500 hotels worldwide, ownership of 30 brands and Marriott’s intent to join its loyalty program with the Starwood Preferred Guest program.

4 November 2015 – During the a Q3 2015 earnings call, Hyatt Hotels Corporation President and CEO Mark Hoplamazian refuses to discuss the rumors that link Hyatt as the potential buyer for Starwood.

At the time, Hyatt and Shanghai Jin Jiang International Hotels Company Limited are two of the most likely candidates to acquire Starwood, according to multiple media reports, including The New York Times and The Wall Street Journal.

29 October 2015 – Starwood’s interim CEO Adam Aron tells shareholders that the company’s pending sale and strategic review process should be completed within 60 days.

While Aron declines to publicly comment on the possible interests of Hyatt and Jin Jiang Hotels acquiring Starwood, Starwood stocks jump 16% over a two-day span from 27-28 October.

17 August 2015 – After nearly four months since Starwood officials launch their strategic review to explore the company’s strategic and financial alternatives, Senator Investment Group ends its ownership stake in Starwood. The stake comprises 5.65 million outstanding Starwood shares and accounts for a 3.3% investment in the company, according to SNL Financial

30 July 2015 – During Starwood’s Q2 2015 earnings call, interim CEO Adam Aron tells investors and shareholders there is “nothing specific to report” concerning Starwood’s strategic review and its search for a new CEO. Around this time, InterContinental Hotels Group and a partnership between Jin Jiang Hotels and Plateno Group emerge as potential Starwood buyers.

In a separate statement to Hotel News Now, IHG denies the report that it intends to buy Starwood: “Following recent market speculation, the board of directors of IHG states that it is not in talks with Starwood with a view to a combination of the businesses.”

Pictured here is the Sheraton Huzhou Hot Spring Resort (Photo: Starwood)

1 June 2015 – In the midst of speculation about the company’s future, Starwood launches a 10-point overhaul of its Sheraton brand. The plan includes the addition of Sheraton Grand and to open more than 150 Sheraton properties by 2020.

30 April 2015 – During Marriott’s Q1 earnings call with analysts, President and CEO Arne Sorenson says a potential Starwood buy doesn’t fit into Marriott’s acquisition strategy.

“You can see there are quite profound differences between the deals we’ve done and that hypothetical transaction,” Sorenson said, mentioning Marriott’s past acquisitions of AC Hotels, Gaylord Hotels, Protea Hotels and Delta Hotels & Resorts.

29 April 2015 – Hours before a Q1 2015 earnings conference call, Starwood executives reveal the company’s plans to explore strategic and financial alternatives in Starwood’s future. Chairman Bruce Duncan tells analysts during the earnings call that company executives “are taking aggressive steps to accelerate Starwood’s growth, improve performance and sharpen our focus on operational excellence.”

The same day, Hilton Worldwide Holdings President and CEO Chris Nassetta tells analysts during Hilton’s Q1 2015 earnings call that the company has no interest in acquiring Starwood.

(Photo illustration: Jon Edwards)

17 April 2015 – Starwood’s interim CEO Adam Aron—appointed after the resignation of former CEO Frits van Paasschen—dodges a question about the company possibly selling assets and brands during an exclusive interview with Hotel News Now about Starwood’s new soft brand, Tribute Portfolio.

“I actually think that’s a question for another day. … The company has been on a path toward its asset-light strategy for several years,” Aron said.

17 February 2015 – After a seven-year tenure with Starwood, President and CEO Frits van Paasschen announces his resignation from the company. Van Paasschen’s departure is mutually reached by the outgoing executive and Starwood’s board of directors.

Board Chairman Bruce Duncan said the time was right for a leadership change, and that the move was “something that’s been building over the past few months.”

“This is not about strategy. … This is all about execution. We want to do better,” Duncan said.


Compiled by Dan Kubacki.

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