Ding-dong, a major deal in the hospitality industry is dead. Early on Monday morning, Choice Hotels announced it was abandoning its $8 billion hostile takeover bid for Wyndham Hotels & Resorts that was made public five months ago.
Even before Choice publicly announced its intentions in October, Wyndham had already rejected four offers from Choice, starting with an bid of $80 per share last April, then $85 in May and $90 in August of 2023. In November, Choice tried again with a $86-per-share offer, which Wyndham characterized as “a step backwards.”
Choice kept pushing, however, giving Wyndham stockholders until last Friday to tender their shares but ultimately finding insufficient support. “As such, Choice has decided not to extend the exchange offer and is withdrawing its slate,” Choice said in a statement.
Had a majority of Wyndham shareholders heeded Choice’s appeal, the company would have replaced Wyndham’s board members with its own slate of directors and moved to control the company.
Earlier on Monday, Wyndham had sent letter to its shareholders urging them to support its own eight director nominees. “Choice’s opportunistic offer comes at a time when Wyndham continues to outperform Choice across key operating drivers and metrics,” Wyndham argued. “Choice has a slower-growing business, lower profitability and, post-transaction, would have higher leverage. Choice views Wyndham as a medicine cabinet of remedies for its many ailments.”
Had Choice’s bid been successful, the acquisition would have been a massive merger in the budget hotel chain space, combining the fifth- and sixth-largest hotel groups in North America to create the continent’s largest budget hotel franchisor. Wyndham describes itself as the largest hotel franchisor in the world, with 9,280 locations across 24 brands in 95 countries. The stable runs the gamut from economy chains like Days Inn and Super 8 to mid-range brands like Ramada and La Quinta to upscale hotels like the eponymous Wyndham. Choice Hotels operates nearly 7,500 properties spanning 22 brands, including Comfort Inn and Quality Inn.
Thus ends a long saga that has distracted both companies. Since the market closed on Friday, Choice’s share price has jumped 8.2%, while Wyndham’s share price has dropped 1% and was at $75 minutes after markets opened on Monday.
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