China's Anbang drops bid for Starwood Hotels: reports

China's Anbang has told Starwood Hotels & Resorts Worldwide that it is withdrawing its proposed $14 billion takeover offer, US media reported Thursday, citing people familiar with the situation.

Starwood now can pursue its agreed $13.6 billion merger deal with Marriott International that would create the world's largest hotel chain.

Starwood shares fell 4.5 percent to $79.70 in after-market trade and Marriott was down 4.9 percent at $67.70.

A consortium led by Anbang Insurance Group, including China-based Primavera Capital and US private-equity investor JC Flowers & Co., has been in a heated bidding war with Marriott for Starwood.

Over the weekend the Anbang-led group sweetened its all-cash offer to $82.75 per share, or $14 billion.

Starwood had accepted Marriott's $13.6 billion cash-and-stock offer on March 21.

Starwood said Monday it was considering the new Anbang bid, which was "reasonably likely" to be superior to Marriott's, but was continuing to discuss "non-price terms" with the suitors.

Starwood at the time said its board was still recommending the offer from Marriott, which reaffirmed its commitment to the acquisition. But Marriott warned Starwood shareholders to focus on the Anbang-led offer's financing and timing of any required regulatory approvals.

An Anbang acquisition of Starwood would be the largest Chinese takeover of a US company, exceeding pork producer WH Group's purchase in 2013 of Smithfield Foods in a $7.1 billion deal.