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Starwood Is Seen as Acquisition Target for Hyatt, Chinese Firms

Starwood Hotels Resorts Worldwide Inc., a camp association that hired an confidant progressing this year to assistance try vital options, has a new suitor.

Hyatt Hotels Corp. is in modernized talks to buy Starwood, according to a CNBC news Wednesday. At slightest 3 Chinese firms also are opposed to acquire the Stamford, Connecticut-based company, pronounced a chairman with believe of a matter. Also Wednesday, Starwood pronounced a timeshare unit, Vistana Signature Experiences, will be spun off and acquired by Miami-based  Interval Leisure Group Inc.

Starwood, whose brands embody W, Westin and St. Regis, announced in Apr that it hired Lazard Ltd. and was exploring options including a probable sale. The company, led by halt Chief Executive Officer Adam Aron after a abdication of longtime conduct Frits outpost Paasschen in February, had been lagging behind competitors such as Marriott International Inc. and Hilton Worldwide Holdings Inc. in expanding a series of hotels carrying a brands.

Starwood’s sale of a timeshare business might be a preface to a multiple with Hyatt, that formerly sole a possess timeshare section to Interval, pronounced Michael Bellisario, an researcher during Robert W. Baird Co.

“The ensuing hotel-only business should be some-more appealing to any intensity acquirer,” he said. “It lessens a sum investment indispensable by about $1.5 billion and a timeshare business is not as good accepted by a investment community.”

Shares Rise

Starwood shares were adult 4.9 percent to $78.49 during 12:22 p.m. in New York, after rising as most as 11 percent. Hyatt slipped 2 percent to $49.56.

Amy Patti, a mouthpiece for Chicago-based Hyatt, and Carrie Bloom, a Starwood spokeswoman, declined to criticism on a CNBC report.

CNBC’s David Faber pronounced a Hyatt understanding for Stamford, Connecticut-based Starwood could come as shortly as subsequent week, citing people informed with a talks. The company’s first Pritzker family controls Hyatt by a tenure of super-voting Class B shares.

Hyatt’s timeless brands, generally Hyatt Place, in a limited-service hotel shred could assistance Starwood block a hole in a possess select-service business, Bellisario said.

‘Formidible Competitor’

“Hyatt’s problem is it’s only smaller — about one-fifth of a distance of Hilton and Marriott,” he said. If it combines with Starwood, “they would turn a really challenging competitor.”

Hyatt had 41 owned or leased hotels with about 20,000 bedrooms as of Jun 30, in 10 countries. The association has pronounced it wants to boost a suit of bedrooms outward a U.S. from 18 percent to 22 percent in owned and leased properties. Hyatt owns resources in Paris, London, Zurich, Seoul and Mexico City in further to a U.S.  

Starwood, as of Sept. 30, owns, leases or binds by corner ventures a sum of 32 hotels worldwide, including St. Regis properties in New York, San Francisco and Florence, Italy, and Luxury Collection hotels in Spain, Austria and Argentina. They have a sum of 12,339 rooms.

One advantage to a takeover by Chicago-based Hyatt “would really be a scale of a total platforms,” pronounced Lukas Hartwich, a camp researcher during Green Street Advisors LLC. “Combined, a dual companies would have over 500,000 rooms, that would extremely tighten a opening between them and Hilton and Marriott.”

At slightest 3 Chinese firms also are vying to acquire Starwood, pronounced a chairman with believe of a matter. HNA Group Co., hotelier Jin Jiang International (Holdings) Co. and sovereign resources account China Investment Corp. have any practical to a Chinese supervision for capitulation to ensue with offers for all or partial of Starwood, a chairman said.

Article source: http://www.bloomberg.com/news/articles/2015-10-28/starwood-hotels-shares-rise-on-report-hyatt-in-acquisition-talks

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