Choice Hotels is making a bid to acquire Wyndham Hotels & Resorts. The two hotel giants have been in discussions for months, but Wyndham recently decided to discontinue further talks
Following that decision, Choice publicly confirmed that it had issued a proposal to Wyndham shareholders to acquire all outstanding shares.
Shareholders would receive US$90 per share in cash and stock, a 26% premium on current valuation. The proposal would total nearly US$8 billion ($11 billion CAD) for Wyndham, which operates more than 9,300 hotels across brands including Days Inn, Howard Johnson, La Quinta, Ramada, Super 8, and Travelodge.
Wyndham Grand Cancun All-Inclusive Resort & Villas. (photo via Wyndham Worldwide) (Photo Credit: Wyndham Hotels and Resorts)
Choice is a franchisor for about 7,500 hotels, under brands Comfort Suites, Quality Inn, Cambria Hotels, and more.
"A few weeks ago, Choice and Wyndham were in a negotiable range on price and consideration, and both parties have a shared recognition of the value opportunity this potential transaction represents. We were therefore surprised and disappointed that Wyndham decided to disengage," Choice Hotels President and CEO Patrick Pacious said in a statement.
“While we would have preferred to continue discussions with Wyndham in private, following their unwillingness to proceed, we feel there is too much value for both companies' franchisees, shareholders, associates, and guests to not continue pursuing this transaction. Importantly, we remain convinced of both the many benefits of the combination and our ability to complete it,” he added.
In April of this year, Choice offered US$80 per share, an offer that was rejected by Wyndham. It then boosted that offer to US$85 and then, eventually to US$90. Choice said that Wyndham acknowledged the offer “was in a negotiable range” but eventually made it clear it would not proceed with the deal.
The new proposal would allow Wyndham shareholders to choose either cash, stock, or a combination of the two for compensation. It would also give Wyndham two seats on Choice’s board.
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