CICHY China Construction Bank Corp (PK)

By Julie Steinberg and Kane Wu 

HONG KONG--Chinese state lender China Construction Bank Corp. is stepping up to write a big check for a Chinese insurer's $13.2 billion bid for Starwood Hotels & Resorts Worldwide Inc.

China's Anbang Insurance Group Co. won backing from Starwood's board Friday over an earlier agreed deal with Marriott International Group Inc. Starwood on Friday said its board "believes that the binding and fully financed proposal" from Anbang and its consortium members "provides a high degree of closing certainty."

Anbang, which has been relatively unknown on the global stage until recently, put together a consortium of investors for the deal that includes J.C. Flowers & Co. and China-based private-equity firm Primavera Capital Group. Those investors are providing the equity financing, while China Construction Bank is providing debt financing. Securing financing from the state-owned bank gives the bid an added degree of credibility.

Chinese banks have been eager to fund recent megadeals. China Citic Bank International, for example, is one of the banks leading the syndicated loans for China National Chemical Corp.'s proposed $43 billion acquisition of Swiss pesticide and seed company Syngenta AG, The Wall Street Journal reported last month.

The consortium led by Anbang last week raised its unsolicited bid for Starwood to about $13.2 billion. The group had earlier offered about $13 billion to buy the Stamford, Conn., hotel chain.

The takeover battle reflects China's increasing appetite to do big deals as its economy slows and companies seek higher-yielding assets. Chinese investors have sought to buy U.S. and European properties that stand to benefit from a boom in Chinese travelers abroad.

Starwood said Friday that the new Anbang bid of $78 a share in cash, up from an earlier offer of $76 a share, was superior to a deal it has in place with Marriott. Starwood said it plans to set that deal aside and tie up with Anbang. Marriott has until March 28 to make changes to its own offer.

Anbang Insurance has spent billions purchasing part or all of insurers in South Korea, Europe and the U.S., as well as taking stakes in listed Chinese developers, a bank, a traditional Chinese medicine maker and a wind turbine manufacturer. While it ranks outside the top 10 of Chinese insurers by premiums, the Beijing-based company has done nearly $28 billion worth of deals, according to Dealogic, with most of those acquisitions of foreign companies coming in the past two years.

Write to Julie Steinberg at julie.steinberg@wsj.com and Kane Wu at Kane.Wu@wsj.com

(END) Dow Jones Newswires

March 21, 2016 06:28 ET (10:28 GMT)

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