U.S. hotel operator Starwood Hotels & Resorts Worldwide received a buyout offer from a consortium led by China's Anbang Insurance Group, possibly derailing the company's planned takeover by rival Marriott International.
The offer of $76 per share in cash values Starwood at $12.84 billion. The consortium also includes private equity firms J.C. Flowers & Co and Primavera Capital Group, a source told Reuters.
Marriott said it remained committed to its offer for Starwood, which would create the world's largest hotel chain with top brands including Sheraton, Ritz Carlton and the Autograph Collection.
Marriott's offer of $72.08 per share in stock and cash valued Starwood at $12.18 billion on Nov. 16. That offer is now worth about $11 billion as Marriott shares have dropped 6.5 percent since.
Starwood shares rose 8 percent in premarket trading on Monday.
Anbang owns New York's Waldorf Astoria hotel and has agreed to buy Strategic Hotels & Resorts Inc from Blackstone Group LP (BX.N) for around $6.5 billion, a person briefed on the matter told Reuters on Saturday.
Anbang's offer of $76 per share for Starwood excludes the amount shareholders will receive as part of the previously announced sale of Starwood's vacation ownership business, currently valued at about $5.50 per Starwood share.
Interval Leisure Group (IILG.O) said in October it would buy Starwood's vacation ownership business, Vistana Signature Experiences, then valued at about $1.5 billion.
Marriott's offer of $72.08 per share also excluded the vacation ownership business.
Starwood said it received a waiver from Marriott that allows it to engage in discussions with the consortium. The waiver will expire at 11:59 p.m. ET on March 17.
Lazard and Citigroup Global Markets Inc are financial advisers to Starwood. Cravath, Swaine & Moore LLP is legal counsel.