LOS ANGELES (Reuters) - Starwood Hotels & Resorts Worldwide Inc. (HOT.N: Quote, Profile, Research, Stock Buzz), owner of the Sheraton, Westin and St. Regis chains, is exploring high-end acquisitions outside the United States, a top executive said on Wednesday.
Starwood would be interested in buying smaller, high-end hotel brands, such as an Asian equivalent of its Le Meridien acquisition, Chief Financial Officer Vasant Prabhu said at the Reuters Hotels and Casinos 2007 Summit in Los Angeles.
"If we can buy a brand that is complimentary to what we have, like we did with Meridien, where we think quite a bit of shareholder value was created, we would do that," Prabhu said.
"Outside the U.S., clearly the near-term opportunities I believe remain in what I would call the high end."
He added that he was not aware of any brands up for sale, and that Starwood likely would bring in a real estate partner in any such deal.
Starwood has been selling hotels and retaining management contracts as well as franchising its brands -- a strategy that has helped to free up capital.
At the same time, Starwood bought back fewer of its shares in the fourth quarter than the rest of 2006. The change has left analysts wondering what it plans to do with its available cash, and whether it could also become a takeover target.
Asked if Starwood itself could become the target of a private equity takeover attempt, Prabhu said that if public markets undervalued the company, "then there is always a risk that companies go private."
He declined to say whether White Plains, New York-based Starwood has had any discussions with private equity firms, but said he felt the markets undervalued the hotel company.
"In my view, you can lay out our owned hotel portfolio side by side with any owned hotel portfolio you can buy and ours is better on many fronts," Prabhu said.
"Our owned real estate is not valued right in terms of what a private market might value at," Prabhu said. "If you value that portfolio on its own merits, you will see that it has a higher valuation than what is implied in what we are trading at today."
Starwood shares closed up 1.8 percent, or $1.24, to $69.02 on the New York Stock Exchange. The stock is near its 52-week high of $69.64 on February 9.
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