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Sheraton shakeup planned as Starwood mulls options

May 7, 2015 Headline News, Hotel News No Comments Print Print Email Email

egtmedia59Shares in Starwood Hotels & Resorts Worldwide, the owner of brands including the W and St Regis, rose more than at any time over the past in five years last week following an announcement that the company is planning to explore strategic alternatives.

Investors.com said the decision opened the door to a company sale.

A statement issued by Starwood Hotels & Resorts Worldwide, Inc said that its board of directors had decided “to explore a full range of strategic and financial alternatives to increase shareholder value, and has retained Lazard to assist in the process”.http://connect.hsmai.org/AsiaPacific/Home

Lazard is a major international financial advisory and asset management firm, providing advice on mergers, acquisitions, restructuring, capital structure and strategy.

Chairman of the Starwood board, Bruce W. Duncan, said: “Our board has always been focused on maximizing long-term shareholder value, and this is a time of enormous opportunity and change in our industry.

“Accordingly, we will thoroughly explore the full range of strategic and financial alternatives available to Starwood to capitalise on our industry-leading global platform and best-in-class premium brands. No option is off the table, and we will take the time we need to thoroughly evaluate our opportunities and achieve the best result for our shareholders, business partners, and associates.

“The Board is in the beginning stage of the strategic and financial review, and no assurance can be given as to its outcome or timing. The Company does not intend to make any further public comment regarding the review until it has been completed.”

Skift.com reported that Starwood’s interim chief executive Adam Aron had basically admitted to financial analysts that the company’s Sheraton brand had become tired and that service quality is was subpar in some locations.

Skift conceded that Aron didn’t put it that bluntly, “but that was the message”.

Noting that Sheraton accounts for more than 40% of Starwood’s global footprint, Aron said that in North America Sheraton needed “to be significantly reinvigorated with a boost that can only come from top-notch marketing”.

That would be achieved with already budgeted or reallocated funds, he said.

Specifics of the plan for Sheraton will be announced at the end of June.

Written by Peter Needham

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