This is a whole hearty M&A tension, the kinds I used to be in the midst back in time, and now I am watching from the sidelines. Last week, I broke the news that Starwood got a suitor in a Chinese investor group, who were willing to buy them out in a higher priced all-cash deal instead of Marriott, who wanted to acquire Starwood in a cash & stock deal. The Chinese investors started at USD 76 per share of common stock, but later increased their bid to USD 78 per share.

It turns out Marriott made a sweet revised bid, which was revealed in the new filings made by Starwood Hotels just this morning. According to the new bid, which has been accepted by Starwood:

Pursuant to the Amendment, stockholders of Starwood will now receive, for each share of Starwood common stock held, 0.80 shares of Marriott common stock and $21.00 in cash, without interest.  Prior to entering into the Amendment, the merger consideration payable to each stockholder of Starwood for each share of Starwood common stock held was 0.92 shares of Marriott common stock and $2.00 in cash, without interest.

(bolding mine)

Also, the termination fee payable to Marriott, in case Starwood still decided to take a step back, would now be at US Dollars 450 million, in case there is another bid on Starwood here on. There will also be a payout of USD 18 million due, towards the cost of financing this merger if Starwood takes a step back now.

Bottomline: The current stock + cash price bid on today’s pre-opening price stands at USD 79 approximately, which tops the bid of the Chinese investors. The news is, SPG is not going to stay independent anymore.

What do you guys think about this merger move now?

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