Tuesday, January 6, 2009

Zell’s zeal for Starwood deal?

Sam Zell, the investor who led the deal to take newspaper publisher Tribune Co. private (which turned into a mess last month when Tribune filed for Chapter 11 bankruptcy), appears to have his next target in mind: Starwood Hotels & Resorts Worldwide.

According to regulatory filings with the SEC on Monday, he increased his stake in Starwood by 7.7 percent to become the company’s second-biggest shareholder.

Starwood signed a confidentiality agreement with Zell's Equity Group Investments LLC last week, according to a regulatory filing.

"We are delighted that you are showing such confidence in the company," Starwood wrote in a letter to Equity Group appended to the filing. "We agree to make available to you ... certain confidential information about the company.”

A Bloomberg report quotes James Corl, chief investment officer for real estate securities at Cohen & Steers, saying that Zell’s emergence as a buyer may signal the commercial real estate market has bottomed.

“It’s a huge data point,” Corl said. “Sam Zell as a seller started the REIT market decline last February and I think Sam Zell as a buyer probably marks the bottom in real estate stocks.”

So readers, any thoughts on what this will mean for Starwood?

How about bets on what consolidation we’ll see in the industry this year?

Looks like 2009 is getting off to a quick start.

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