NEW YORK (TheStreet) -- Shares of Starwood Hotels & Resorts Worldwide (HOT) are slipping by 4.91% to $79.33 on heavy trading volume Friday afternoon, as a group of investors led by Chinese insurer Anbang abandoned its bid to takeover the hotel company after yesterday's market close.
This clears the way for Marriott International (MAR) to complete its purchase of Starwood, which operates hotels such as the Westin, Sheraton, St. Regis and the W.
In November, the two hotel operators had originally agreed to a $12.2 billion merger, before Anbang emerged with an unsolicited offer, RealMoney's Tony Owusu wrote in an article yesterday.
Anbang's most recent offer was for $82.75 per share, or about $14 billion, after a bidding war with Marriott.
"We were attracted to the opportunity presented by Starwood because of its high-quality, leading global hotel brands, which met many of our acquisition criteria, including the ability to generate consistent, long-term returns over time," Anbang said in a statement cited by Reuters.
"However, due to various market considerations, the consortium has determined not to proceed further," Anbang added.
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.
"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 dropping 5.56% to $67.22 on Friday afternoon on heavy trading volume.
Roughly 12.26 million of the company's shares changed hands so far today compared to its average volume of 4.87 million shares per day.
About 8.19 million of Starwood's shares were traded by this afternoon vs. its average volume of 5.17 million shares per day.
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