Choice Hotels International is intensifying its pursuit of acquiring Wyndham Hotels & Resorts, launching a hostile bid after facing repeated rejections. The move comes as Choice refuses to abandon its ambition to bring the two hotel giants together, offering shareholders the same deal proposed in October.
On Tuesday, Choice reiterated its offer to Wyndham, presenting a bid of $49.50 in cash and 0.324 shares of Choice common stock per Wyndham share. This values the deal at $40.50 based on Choice’s trading price as of October 16, 2023, the day before the initial public offer.
Despite Wyndham’s rejection of an unsolicited $8 billion offer in October, citing regulatory concerns, Choice Hotels International remains steadfast in its belief that a merger would be pro-competitive and beneficial for both companies, shareholders, franchisees, guests, and associates.
Wyndham, boasting over 9,000 hotels across 24 brands, had expressed reservations about the initial proposal, with Chairman Stephen Holmes highlighting “significant business, regulatory, and execution risk.” According to Holmes, Choice had been “unwilling or unable to address” Wyndham’s concerns.
Choice Hotels CEO Patrick Pacious revealed that the companies had been engaged in discussions about a potential merger for nearly six months before talks were abruptly halted by Wyndham. This led Choice to make its bid public earlier this year, initiating the acquisition proposal in April at $80 per share in cash and stock. Despite subsequent increases to $85 and then $90 per share, Wyndham rejected the proposals and declined further engagement.
The hostile bid signals Choice Hotels International’s determination to proceed with the acquisition, emphasizing the potential synergies and value creation for all stakeholders involved. As the hospitality industry witnesses this unfolding corporate drama, the future of the proposed merger remains uncertain, contingent on how both companies and their shareholders respond to the latest bid.
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