Choice Hotels aims to acquire Wyndham in $7.8 billion hostile takeover

17.10.2023 - 15:19 / thepointsguy.com / Patrick Pacious / Geoff Ballotti

The battle of the budget hotel brands is moving to all-out war.

Choice Hotels, owner of brands like Cambria Hotels and Comfort Inn, announced Tuesday morning a proposal to acquire Wyndham Hotels & Resorts — owner of brands like La Quinta and Ramada — for $7.8 billion. Factoring in Wyndham's debt, Choice leadership claims the deal values its takeover target at nearly $10 billion.

The company also noted it had been engaged with Wyndham regarding a deal for six months before those talks stalled. Wyndham made a "decision to disengage from further discussions with Choice," per the announcement.

The potential tie-up, first reported in the Wall Street Journal in May, has been the talk of the hotel industry for months — especially as competitors like Marriott and Hilton enter the more affordable end of the hotel market where Choice and Wyndham have significant market share.

Choice Hotels would not comment further on the deal, and Wyndham Hotels & Resorts did not respond to TPG's request for comment in time for publication Tuesday. Wyndham CEO Geoff Ballotti declined to answer a reporter's question regarding the then-rumors of a potential deal during a press roundtable at a recent Wyndham owners' conference in Southern California.

"We have long respected Wyndham's business and are confident that this combination would significantly accelerate both Choice's and Wyndham's long-term organic growth strategy for the benefit of all stakeholders," Choice Hotels CEO Patrick Pacious said in a statement. "For franchisees, the transaction would bring Choice's proven franchisee success system to a broader set of owners, enabling them to benefit from Choice's world-class reservation platform and proprietary technology to drive cost savings and greater investment returns."

"Additionally, the value-driven leisure and business traveler would benefit from the combined company's rewards program, which would be on par with the top two global hotel rewards programs, enabling them to receive greater value and access to a broader selection of options across stay occasions and price points."

Pacious alluded to the now-hostile takeover nature of his company's bid for Wyndham and noted that, a few weeks ago, the two companies were "in a negotiable range on price and consideration" over the deal before Wyndham walked away. The Choice CEO claimed both companies saw value in the deal.

"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," Pacious said. "Importantly, we remain convinced of both the many benefits of the