NEW YORK (TheStreet) -- Shares of Starwood Hotels & Resorts Worldwide (HOT) are falling by 5.33% to $78.98 in early afternoon trading, as an investor group led by Chinese insurer Anbang walked away from its proposed takeover of the hotel operator after yesterday's market close.
This clears the way for Marriott International (MAR) to complete its acquisition of Starwood.
The two hotel companies had originally agreed to a $12.2 billion merger in November, before Anbang emerged with an unsolicited offer, RealMoney's Tony Owusu wrote in an article yesterday.
Most recently, Anbang had offered $82.75 per share, or about $14 billion, after a bidding war with Marriott.
At the time, Starwood said that Anbang's offer would likely lead to a "superior proposal" to Starwood's previous merger agreement with Marriott. This would have allowed Starwood to engage in talks with and provide diligence information to Anbang.
TheStreet's Jim Cramer, Portfolio Manager of the Action Alerts Plus charitable trust, commented: "The Chinese communists walk away from Starwood. Holy cow! We don't really know why. I have a theory. They got too big. They got too much publicity and the Chinese communists want to operate under the radar screen because it's an election year."
Anbang is controlled by the Chinese communist party, Cramer noted.
"Marriott lost a big poker hand. They kept raising and raising and fold. Now they have to own it and they paid way too much," Cramer said.
"My understanding is that the first Anbang deal was fully committed but the financing for the second one was sketchy so Marriott may not have fared all that badly after the synergies are taking into account. But it was a full price wrenched out for certain," Cramer added.
Shares of Marriott are diving by 6.1% to $66.84 on Friday afternoon.
Separately, TheStreet Ratings Team has a "Buy" rating with a score of B on Starwood.
This is driven by a few notable strengths, which should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks covered.
Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated.
The team believes its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: HOT