Choice Hotels is launching a hostile takeover offer for Wyndham Hotels & Resorts after repeated attempts to reach a deal with the rival hotel chain were rebuffed.
Choice Hotels said Tuesday that its exchange offer to shareholders of Wyndham remains the same as its last bid, which was $49.50 in cash and 0.324 shares of Choice common stock per Wyndham share. The exchange offer gives Wyndham shareholders the chance to choose to receive all cash, all shares or a combination of the two.
The offer puts the value of the deal at about $8 billion.
“While we would have preferred to come to a negotiated agreement, the Wyndham Board’s refusal to explore a transaction has left us with no choice but to take our proposal directly to Wyndham’s shareholders,” Choice CEO Patrick Pacious said in a prepared statement. "Wyndham chose to publicly reject our last proposal without any engagement even after we addressed their concerns, including adding significant regulatory protections for their shareholders.”
Choice has been trying to work out a deal for Wyndham for a while, but has been met with pushback. In October Wyndham rejected an unsolicited $8 billion buyout offer from Choice. At the time, Wyndham, which runs Days Inn, La Quinta, Ramada and a host of other brands, called the proposal “opportunistic” and said that it undervalued the company's growth potential. The offer was rejected unanimously by its board.
Wyndham Chairman Stephen Holmes also said in October that Choice's bid was "subject to significant business, regulatory and execution risk,” and that Choice had been unable to address Wyndham's concerns.
Choice has said that it went public with the bid after six months of negotiations broke down.
Wyndham did not immediately comment after being contacted by The Associated Press early Tuesday.
The exchange offer is set to expire on March 8, 2024 unless extended or terminated.
Choice said it currently holds about 1.5 million shares of Wyndham Hotels & Resorts Inc. shares valued at more than $110 million.
Choice Hotels International Inc., which is based in Rockville, Maryland, runs about 7,500 hotels in 46 countries. It’s seeking to absorb a much larger chain in Wyndham, which operates nearly 9,300 hotels that also include Howard Johnson, Super 8 and Travelodge.
Michelle Chapman, The Associated Press
