The surprise move comes as Anbang appeared close to securing Starwood's agreement for a deal that would have topped an earlier merger pact between Marriott International Inc.
Starwood, which has popular brands including Sheraton, W Hotels, St. Regis and Westin, now plans to revert to Marriott's last offer, which valued Starwood at $13.6 billion at the time of the offer, unidentified sources said.
Reuters, citing sources familiar with the matter, said that Anbang had never followed through with its March 26 proposal to Starwood to make its offer binding. The company did not provide a reason to Starwood for walking away, Reuters reported.
Starwood and US representatives for Anbang did not immediately respond to requests for comment, Reuters said.
Shares of Starwood fell 4.2 percent to $79.90 in after-hours trading, while Marriott shares declined 5.1 percent to $67.55.
Anbang had fired the latest shot in a bidding war, offering $14 billion for Starwood agai nst Marriott's $13.6 billion proposal.
In a Monday statement, Starwood said that its board had determined that the Anbang-led offer was "reasonably likely" to lead to a "superior proposal" to the proposed Marriott deal. Starwood said at the time that the Anbang proposal was non-binding, but that the company and the consortium were "working to finalize the other terms of a binding proposal from the Consortium, including definitive documentation."
Anbang has mounted an aggressive expansion into the US hospitality industry, agreeing to buy Strategic Hotels & Resorts from Blackstone for $6.5 billion earlier this month and concluding a deal last year to acquire New York's Waldorf Astoria for $1.95 billion.
Source: China Daily
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