NEW YORK — Starwood called off a $12.2 billion buyout agreement with Marriott in favor of an offer from a group of investors led by the Chinese insurance company Anbang.
The decision came after Anbang upped its offer for Starwood by nearly $370 million Friday, bringing the total to more than $14 billion.
Starwood, which owns the Sheraton and Westin hotel brands, has to pay Marriott $400 million to end the deal.
Marriott has until March 28 to make another offer. Marriott International Inc. said Friday that it still believes its deal with Starwood is superior, and is contemplating its next step. Marriott first offered to buy Starwood in November.
The new deal from Anbang and the investors is worth $83.67 for each share of Starwood, up from its previous offer of $81.50 per share. Starwood shareholders would get $78 per share in cash plus $5.67 in stock for a spinoff of a vacation business.
Shares of Starwood Hotels & Resorts Worldwide Inc. rose more than 5 percent to $80.39 in morning trading Friday.