Starwood shares pop amid reports Chinese firms looking to buy

Hotel stocks get a lift

Starwood Hotels & Resorts shares spiked amid reports that at least three big Chinese companies are vying for a bid to buy the hotel firm.

Shares of the hotel company jumped as much as 12.5 percent to $77.10 a share.

Shanghai Jin Jiang International Hotels, HNA Group, and China Investment, have each presented a proposal to the Chinese government over the past two months, people with knowledge of the discussions told Dow Jones.

According to Dealogic, this sets the stage for what could be the largest Chinese acquisition of a U.S. company.

However, American hoteliers aren't unfamiliar with this type of deal. Chinese insurance group, Anbang, paid nearly $2 billion this year for the Waldorf Astoria hotel on New York's Park Avenue. This deal marked a record sales price for a U.S. hotel. Another Chinese insurer paid more than $2 million a room for New York's Baccarat Hotel. That price was an all-time high on a per-room basis.

Earlier this month, Reuters reported that cruise operator Carnival was planning to launch a Chinese cruise line in a $4 billion joint venture with two Chinese firms.

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While it's unclear how much the Connecticut hotel operator could sell for, sources familiar with the matter say any bids from the aforementioned Chinese companies would be higher than Starwood's current market value of about $13 billion.

Starwood has more than 1,200 properties worldwide under brands like Westin, W Hotels and St. Regis. If Starwood and Jin Jiang were to merge, the combined company would own, operate, or franchise about 700,000 hotel rooms globally according to hotel data tracker STR and company websites. The only other hotel companies with that level of global reach areHilton, Marriott International, and InterContinental Hotels.

According to Dow Jones, Starwood's board indicated it would be open to a sale in April, amid concerns it wasn't growing as fast as rival hotel operators.

In addition to Starwood's stock pop, competitors like Hyatt and Marriott International were also trading higher as a result of the report. (Check Starwood's share now.)