NEW YORK (AP) - Starwood Hotels is nearing a deal to sell the company or merge with another hotel chain, its CEO said on an earnings call Wednesday.
NEW YORK (AP) — Starwood Hotels is nearing a deal to sell the company or merge with another hotel chain, its CEO said on an earnings call Wednesday.
"This has the company's highest attention," interim CEO Adam Aron said. "Our clear goal is to optimize the value for our shareholders."
Back in April, Starwood announced its board was exploring strategic options for the hotel company. At the time, Starwood didn't mention a sale, but analysts considered it a possibility.
Speculation about a potential buyer heated up this week. First the Wall Street Journal reported that three Chinese companies were seeking government approval to place bids for Starwood. Then Wednesday CNBC reported that Hyatt Hotels Corp. was close to purchasing Starwood in a cash and stock deal that would leave Hyatt management in control of the combined company.
Spokeswomen for both hotel chains declined to comment about any possible deal.
Starwood shares have rallied on the reports, gaining 9.1 percent Tuesday and rising 6.6 percent to $79.74 in afternoon trading Wednesday.
"Our progress is active and nearing conclusion," Aron told investors Wednesday afternoon. He wouldn't comment on any specific deal, but said: "I would be surprised if we don't have answers to these questions by the end of this calendar year."
Starwood Hotels & Resorts Worldwide Inc., based in Stamford, Connecticut, has a market capitalization of $13.6 billion; Hyatt's is $7.1 billion. Starwood, which includes the Westin, Sheraton, W and St. Regis brands, has 1,271 hotels with a combined 362,623 rooms. Hyatt, has 618 hotels with a combined 160,205 rooms.
A merger of the two would help the new company better compete with hotel giants Marriott International, Hilton Worldwide and Intercontinental Hotels Group, all which have more than 4,000 properties and roughly 700,000 rooms each.