Choice Hotels International announced on Monday morning that the company has terminated its hostile takeover efforts of rival Wyndham Hotels & Resorts.
According to Reuters.com, Choice said the decision was made after the hotel giant failed to earn enough support from Wyndham shareholders. As a result, Choice also abandoned its efforts to nominate independent director candidates to Wyndham's Board of Directors.
Choice first announced the unprompted cash-and-stock offer of around $8 billion to Wyndham in October 2023, but the deal was met with resistance by Wyndham officials, who believed the pitch was undervalued and created antitrust risks.
“The Wyndham Board is pleased that Choice has ended its hostile pursuit and proxy contest, following the expiration of its unsolicited exchange offer,” said Stephen P. Holmes, Chairman of the Board. “We are confident in Wyndham’s standalone strategy and growth prospects under the leadership of our proven management team. The Board remains committed to acting in the best interests of our shareholders and driving superior long-term value creation.”
In addition, Choice revealed its Board of Directors approved an increase in the number of shares authorized under its share repurchase program by five million. When added to the remaining number of available shares authorized for repurchase, this results in a total authorization of approximately 6.8 million shares.
Choice released a statement about its decision to abandon its Wyndham takeover plan:
Given Wyndham's refusal to constructively and substantively engage on terms, Choice took the extraordinary step of launching the exchange offer to initiate the regulatory review process and engage with Wyndham stockholders.
While the support from Wyndham stockholders tendering into the exchange offer was significant considering the number of investors structurally prevented from participating at this stage, it was not sufficient for Choice to conclude – particularly when taking into account the Wyndham board's obvious continuing disinterest in a combination – that a path towards a transaction is available at this time.
As such, Choice has decided not to extend the exchange offer and is withdrawing its slate. Choice intends to continue focusing on its standalone strategy, which the company is confident will create significant long-term value for its stockholders and franchisees.
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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.