Starwood Hotels/Marriot: Nobody's ready to tap out yet
TAG notes the increase in the bid to $82.75 from $79.53 (both of which exclude Vistana) from Anbang does not seem out of reach for MAR, while they believe the Anbang consortium could have the advantage in terms of leverage tolerance. While MAR shares moved positively on the Anbang bid, they hesitate to become too bullish on MAR ahead of a potential counter offer from the co. They consider the possibility realistic that MAR could bid higher as the strategic rationale for the deal is generally sound, although it becomes increasingly difficult to own the stock in the near term should it choose that course. The read-across remains increasingly positive for HLT and H, which are owners of assets and are trading at 10.3X and 8.7X 2016E EV/EBITDA, respectively, which is considerably lower than the levels of HOT's prospective deal. In particular, they believe HLT shares should benefit more from the lift in hotel valuations given that it is in the process of establishing a REIT for its asset ownership in 2016.