What Is Anbang, And Why Are They So Mysterious?

This NYT article: http://www.nytimes.com/2016/03/23/business/dealbook/the-unsettling-acquisitiveness-of-a-chinese-insurer-in-the-us.html

Gives strong reason to worry about Anbang being a more meddlesome owner than one might prefer. From the selfish perspective of an SPG elite I don't much care about whether Anbang portends some greater economic challenges in China, but the fact that they like to be difficult to the management teams of companies they own is worrying.

So what they're trying to say is that this is one of three things:

1) Money skimmed by Chinese government leaders, either legally or illegally
2) Money laundering by the Chinese mob
3) A company that buys up companies for their available cash positions and sucks them cash-dry to pay for other investments

I don't see how any of those things are better for the operators of Starwood properties than being reflagged as Marriott. And I had a Starwood property getting close to the end of its franchise agreement, I'd be looking hard at reflagging at my earliest opportunity.

Two words: capital controls. Same reason a shack in YVR now sells for 7 figures...

Anbang is dodgy beyond belief. Their growth is a mystery to anyone in Asia. That they have cash is not in question. What is doubted is where the cash comes from and whether they are intrinsically (unavoidably) beholden to some political figures. They have a sudden and inexplicable interest in hospitality, totally at odds with their investment strategy till date.

http://www.economist.com/news/finance-and-economics/21642197-once-obscure-chinese-financial-firm-leaps-spotlight-big-anbang

http://www.reuters.com/article/us-starwood-hotels-m-a-anbang-profile-idUSKCN0WH194

They're clearly carrying out instructions from the PRC government for Chinese companies to invest abroad, but it is undoubtedly true that they're opportunists, rather than experts. They would leave the current management of Starwood untouched. Whether that is a good thing or a bad thing depends on whether you're a shareholder or a guest. 🙂

@ DSG --as this is an all-cash offer, what happens to Starwood in the future isn't a concern to any current shareholder. Whereas with a Marriott deal, Starwood shareholders also have to take into consideration future prospects of Marriott's stock.

So, this whole SPG takeover thing is just a detailed version of the Nigerian lottery scam, isn't it? I'm imagining the final scenes of the movie, where SPG is told where to pick up their money, only to find an empty dentists' office, and then the scene cuts to Marriott's boss on the beach in the Turks and Caicos counting $480 million.

I'd put it as a "legal" means to hide/invest ill-gotten gains from major players who have SOOOO much $$ that simply buying foreign assets to get their money out of China has been too tedious and not large enough. It's sketchy any way you look at it, but given not only how many billionaires China has created, but multi-multi-millionaires in the past 10 years, it appears to me to be a "hedge fund" for those ill-gotten gains and they have so much cash on hand, that they need to do something with it....even if that means overpaying for Starwood.

If I was Marriott, I too, would step back and let someone else take the hit and likely in 5--10yrs cherry pick properties from Anbang, assuming they haven't driven it into the ground by then and plundered the assets. I mean, by "doing nothing" they stand to "make" ~ 1/2 billion dollars. You can't tell me they put that much human effort/time/OT/consultants into the deal in the short amount of time. That's laughable. Sure they may lose out of expanding their properties, but the execs stand to make a fat a** bonus either way. Doing nothing, just means it comes all the quicker.

Everyone in china who has a little knowledge behind the scenes know it's Deng Xiaoping's family business. So there is no mystery about it...yeah he passed away like 20 years ago it doesn't say that his power is gone. Diminished for sure but his family still has to eat and live, right?

Obviously Ben/Lucky selfishly prefers this to Marriott since it would likely change the redemption and earnings model, and elite benefits to better recognize cold hard spending like the airlines have done, not bloggers looking to exploit promos. Oh and did I mention this will likely mean one fewer credit to hawk and gain affiliate marketing compensation from?

Hopefully the institutional investors who actually own large numbers of HOT shares will make a prudent decision after careful research and analysis not a selfish, emotionally driven choice based on a vendetta against Marriott and their Marriott Rewards program.

I read the article yesterday. Assuming it's fairly accurate, Anbang is a shady outfit to say the least and it totally changed my view of this bidding war. As an SPG loyalist my earlier reaction was that I would prefer to keep Starwood out of the hands of Marriott. After reading it, my reaction is that there's a pretty good chance that Anbang would run Starwood into the ground - bad news whether you're a stockholder or a guest. I've seen it happen with commercial properties in Southern California that wealthy Chinese have purchased obviously just to park money offshore but with no understanding of how to increase - or even maintain - current value.

The more look at this, the more skeptical I'm becoming of this deal.

I look at the LA Hotel Downtown, which was supposed to be converted to a Hyatt. That property is owned by a group from China. For whatever reason, it never happened. It's been two years and that hotel is still operated independently.

I sound like a broken record but becareful what you wish.

Oh my god a large corporation has a shady history and seems like they just don't have a soul!

That's called capitalism, ain't it? Would really like to see the number of companies in which the Koch Brothers have a large number of shares... The story could be the same as any chinese corp.

Either way, the thought and outcome are always the same: "screw the costumers, let's just make more money!"

I seriously doubt dodgy government officials or Chinese mobs would be willing to accept this kind of exposure from taking on such high profile deals and showcasing their dirty money... It's a suicide mission...
It's more like a Hollywood studio in the 60s backed by a bunch of loaded outsiders.

I just wouldn't trust anything coming out of mainland China, and considering how much influence they are exerting across the strait...I am wary of anything coming out of Taiwan as well. I am shocked that a Westerner who is a professor in a Chinese University has negative things to say about an obviously politically connected company.

The good news is they have a dedicated fax line to a dentists office when you have a toothache
The bad news is that's where the new SPG call center will also be located in some dentists office in China
Probably make IHG in Manila look like rocket scientists
I'm not sure which is worse every Starwood hotel being rebranded as a Courtyard or The AirShebang company taking over Starwood. Perhaps the Chinese food will be good in their hotels going forward and you can earn Starpoints and redeem them for egg rolls?

I find it interesting that those followers of OMAAT who take every opportunity to disparage Lucky and the team over a wide variety of issues still somehow find enough time in their day to follow the blog. I would think they would instead follow something that is more agreeable to them.

To be fair, Anbang would hardly be the first large Chinese or Asian company without a proper website - it's just not seen as a necessity at this point in time. Anyway it's a holding company so there's likely a skeleton staff working there, probably just the chairman, CEO, maybe a few top guys and their support - the real operating companies are its subsidiaries. This would be a more accurate list of contact details: http://www.ab95569.com/announcement/todetailAnnouncement.htm?id=1007201201KXIVRWUW

I mean, anyone tried contacting Berkshire Hathaway before? Check out their website - would you believe it is a major corporation if you had not heard of it before?: http://www.berkshirehathaway.com/

I think you're getting no confused between a Starwood loyalist and a shareholder. The loyalists can want this as much as they desire, but ultimately, the shareholders will decide what's better for their investments. Shareholders don't really give a damn what the consumer wants as long as it pays out

@dt Berkshire may have a barren site, but it links to loads of SEC filings giving people plenty to pore over...no such thing with Anbang

It's moot now - China shut it down

http://www.wsj.com/articles/chinas-anbang-tells-starwood-it-is-walking-away-1459455942