A Memo to Starwood Employees from CEO Tom Mangas About the Anbang Bid
This morning, we learned that Starwood has accepted a bid from a Chinese consortium, which consists of Anbang Insurance Group, J.C. Flowers and Primavera Capital. Marriott now has until midnight on March 28 to respond. Meanwhile, in a company-wide memo this morning, Starwood CEO Tom Mangas addresses today's news — you'll find Tom's note just below:
We just issued a press release (attached) announcing that Starwood has received a revised binding proposal from the consortium consisting of Anbang Insurance Group, J.C. Flowers and Primavera Capital that Starwood’s Board of Directors has determined constitutes a “superior proposal” as defined in Starwood’s merger agreement with Marriott. This is a fluid, live process which is garnering worldwide press attention and has important implications for our people. Therefore I thought it would be helpful to provide you with some context:
- As Starwood’s Board has determined that the consortium’s proposal constitutes a “superior proposal,” the Board intends to terminate the Marriott merger agreement and enter into a new definitive agreement with the consortium, which, in addition to Anbang, also includes J.C. Flowers & Co. and Primavera Limited.
- Our merger agreement with Marriott gives them the right — until 11:59pm ET on March 28, 2016 — to negotiate revisions that would make it as good as or superior to the consortium’s proposal. While we cannot speculate what Marriott will do, Starwood will negotiate in good faith with Marriott during this period and our Board will consider in good faith any changes they propose.
- It’s important to note that Starwood is not permitted to enter into the binding agreement with the consortium — or terminate the Marriott agreement — until the negotiation period with Marriott has concluded on March 28, during which Marriott will have the opportunity to propose revisions to our existing merger agreement with them.
- Given these new developments and the resulting need for Starwood to be able to provide sufficient time for the filing and mailing of additional information regarding these developments to its stockholders, we are postponing our stockholder vote, which was scheduled for Monday, March 28th, to a new date to be determined after consultation with Marriott. Starwood’s Board has not changed its recommendation in support of Starwood’s merger with Marriott.
This is a complicated process that is unfolding in real time and we’re all working swiftly to reach resolution. We hope to have more news to share soon. In the meantime, let’s continue to do what we do best, win in the market place and delight our guests — I’ve been so impressed by our team’s ability to stay focused despite the noise.