|By Robert Manor, Chicago
TribuneMcClatchy-Tribune Regional News
Feb. 5, 2008 - Billionaire Chicago investor Sam Zell has taken a 7.7 percent stake, valued at $737 million, in Starwood Hotels & Resorts Worldwide Inc., with brands that include Sheraton, W, Westin and other hospitality staples.
"The acquisition of common stock ... has been effected solely for the purpose of investment," said a regulatory filing. It said there was no intention of participating in Starwood's business decisions.
In Monday's filing with the Securities and Exchange Commission, trusts and other entities of which Zell is an officer said 14.75 million shares of Starwood's stock were purchased between Oct. 2 and Jan. 31 at an average price of $49.97 per share.
Over the years Zell has developed a reputation for finding value in out-of-favor real estate.
"I think he sees it just as a good investment, a way to take advantage of a depressed hotel stock that owns great brands and has fallen dramatically," said Will Marks, senior research analyst JMP Securities, a boutique investment bank. "Sam has a solid track record of finding bargains."
Separately, Zell is chairman and chief executive of Tribune Co., which owns this newspaper and several other media properties. A spokeswoman said he was traveling Monday and could not be reached for comment.
Starwood stock closed at $46.19 Monday, down 52 cents in regular trading. But in early after-hours trading the stock rose $2.20. Starwood is based in White Plains, N.Y.
Hotels are sensitive to economic conditions and if, as many people believe, the U.S. slides into recession, hotel stocks could suffer. Starwood's stock price has fallen 26 percent since the beginning of last year.
Starwood offers marquee brands, among them Le Meridien and St. Regis, with approximately 850 properties in more than 95 countries and 145,000 employees at its owned and managed properties.
"We don't comment on our investors," said K.C. Kavanagh, a Starwood spokeswoman.
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