NEW YORK (TheStreet) -- Starwood Hotels & Resorts Worldwide (HOT) has agreed to be acquired by Marriott (MAR) in a deal worth $12.2 billion to create the world's largest hotel company.

"This is a terrible deal for Starwood shareholders," TheStreet's Jim Cramer said on CNBC's Squawk on the Street this morning.

He compared the deal with Mylan's (MYL) unsuccessful bid for Perrigo (PRGO) on Friday. After the takeover failed to gain Perrigo shareholder approval, Perrigo stock got crushed while Mylan stock went up.

"Here, I'm pretty confident if Marriott walked away, Starwood would go higher," Cramer said.

The transaction has a current value of $72.08 per Starwood share, which Cramer thinks undervalues the deal. 

Although Cramer stood by his view that a stock's downward reaction to a deal indicates that inaction might have preferable, he did concede that travel and leisure stocks are lower this morning following the terrorist attacks in Paris this weekend.

He noted that there is currently an economic pause, but, regardless, "on a fundamental basis I think that stock would be worth more."

Cramer's charitable trust owns Starwood stock. "I don't like to lose money," he said. "Just say no."

Starwood stock is down 6.32% to $70.25, and Marriott stock is declining 1.12% to $71.93 in Monday morning trading. 

Separately, TheStreet Ratings team rates STARWOOD HOTELS&RESORTS WRLD as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate STARWOOD HOTELS&RESORTS WRLD (HOT) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its notable return on equity and good cash flow from operations. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, STARWOOD HOTELS&RESORTS WRLD's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • Net operating cash flow has increased to $331.00 million or 31.87% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 2.77%.
  • HOT, with its decline in revenue, slightly underperformed the industry average of 1.4%. Since the same quarter one year prior, revenues slightly dropped by 4.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • After a year of stock price fluctuations, the net result is that HOT's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
  • STARWOOD HOTELS&RESORTS WRLD's earnings per share declined by 10.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, STARWOOD HOTELS&RESORTS WRLD increased its bottom line by earning $3.50 versus $2.92 in the prior year. For the next year, the market is expecting a contraction of 13.7% in earnings ($3.02 versus $3.50).
  • You can view the full analysis from the report here: HOT

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.