NEW YORK, March 18 ― Starwood Hotels said today that it favours a takeover bid from a consortium led by China’s Anbang Insurance over an earlier deal with Marriott, after the Anbang group increased its offer.

Starwood’s board was persuaded by Anbang’s US$2 (RM8.20) increase in its Monday offer to US$78 a share, and said it plans to notify Marriott International that their already agreed merger was off.

Starwood had agreed to Marriott’s US$63.74 per share cash-and-stock offer last November for its network of 1,270 properties in 100 countries, including the Westin, Sheraton, Le Meridien and W brands.

But the Chinese giant stepped in the way this week as it announced nearly US$20 billion in two proposed hotel takeover deals.

The Anbang proposal values Starwood at US$13.2 billion and comes as the Chinese giant has also agreed to buy a portfolio of 16 luxury hotel and resort properties from the Blackstone group for US$6.5 billion.

With the new Anbang offer, Starwood’s board said in a statement that it “intends to terminate the Marriott merger agreement and enter into a definitive agreement with the consortium.”

The news pushed Starwood shares up 4.5 per cent to US$79.91 in early trade. Shares of Marriott, which will earn a US$400 million fee for Starwood cancelling their deal, rose 2.0 per cent to US$73.23. Anbang is privately controlled.

Anbang’s partners in the deal include China-based Primavera Capital and US private equity investor JC Flowers & Co.

Anbang first pushed into the US hospitality industry in October 2014 by acquiring the famous Waldorf Astoria Hotel in Manhattan for nearly US$2 billion from Hilton Worldwide Holdings.

The purchases are part of an aggressive international push by the  12-year-old insurer, which reports assets of 1.65 trillion yuan (RM1.03 trillion), more than 3,000 branches in China and over 30,000 employees globally.

In November, Anbang bought US insurer Fidelity & Guaranty Life for US$1.6 billion, after snapping up Korean insurer Tong Yang Life for around US$950 million and Dutch insurer Vivat for about US$167 million earlier in the year. ― AFP