Starwood Hotels dumps Marriott for raised Chinese bid

Starwood Hotels said Friday that it favors 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 $2 increase in its Monday offer to $78 a share, and said it plans to notify Marriott that their already agreed merger was off.

Starwood had agreed to Marriott's $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 $20 billion in two proposed hotel takeover deals.

The Anbang proposal values Starwood at $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 $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.