China's Anbang Insurance Group Co has hired a proxy solicitation firm to advise it on how Starwood Hotels & Resorts Inc HOT.N shareholders view its $12.8 billion acquisition offer and prepare its next steps, people familiar with the matter said.
While Starwood has yet to make a decision on whether to reject or further pursue the non-binding offer, Anbang's move underscores its determination to disrupt Starwood's merger agreement with Marriott International Inc (MAR.O).
Chinese companies are averse to going hostile with their offers for U.S. companies given the political and regulatory roadblocks their proposed deals can face, and there is no indication that Anbang plans to challenge Starwood's board of directors at this stage, the people said this week.
Anbang has hired proxy solicitation firm Georgeson Inc, which has already started to contact Starwood shareholders, the sources said. Anbang will decide on its next move based on Starwood's response to its offer, the sources said.
The sources asked not to be identified because the deliberations are confidential.
Anbang declined to comment. Representatives of Starwood, Marriott and Georgeson did not immediately respond to requests for comment.
Starwood has said it received a waiver from Marriott that allows it to engage in discussions with Anbang and its consortium. The waiver expires at midnight on Thursday but could be extended.
Marriott's cash and stock acquisition agreement, inked in November, currently values Starwood at $67.79 per share. Anbang's consortium, which also comprises private equity firms J.C. Flowers & Co and Primavera Capital Group, has offered $76 per share in cash.
Chinese insurers are rushing to acquire high yielding assets as they struggle to keep up with the policy liabilities of the country's aging population. U.S. assets are also seen as a good hedge against any future weakness in the yuan.
Anbang's $2 billion acquisition of the Waldorf Astoria Hotel in New York, which was completed last year, attracted scrutiny from the Committee on Foreign Investment in the United States (CFIUS), which reviews deals over possible national security concerns. U.S. President Barack Obama used to stay at that hotel when visiting United Nations headquarters in New York.
CFIUS would likely carry out a thorough review of a potential acquisition of Starwood by Anbang, but it would be unlikely to block it, sources close to the matter have previously said.
In November, Anbang agreed to buy U.S. annuities and life insurer Fidelity & Guaranty Life (FGL.N) for about $1.57 billion. That transaction received CFIUS approval earlier this week.
Marriott has said it remained committed to its cash-and-stock deal with Starwood, which would create the world's largest hotel chain with top brands including Sheraton, Ritz Carlton and the Autograph Collection.
(Reporting by Mike Stone and Michael Flaherety in New Orleans; editing by Grant McCool)