As Starwood Considers Strategic Alternatives, a Sale Would Be Best

Starwood Hotels' (HOT) announcement that it's considering strategic and financial alternatives is a wise move, according to FBR Capital Markets analyst Nikhil Bhalla. Bhalla stresses that the best option for the company is to explore a sale. He explains that the value of Starwood lies within its brands like W, Westin and Sheraton, which don't come up for sale very often. He believes other companies would be willing to pay top dollar for them. Bhalla adds that Starwood faces significant challenges that it is unlikely to overcome in the next few years, so its best option is to find a strategic buyer who is ready to take the company out of the public eye, fix it and bring it back to the market through an initial public offering.