Five travel tech startups have announced fundraises this week totaling more than $144 million.
17.10.2023 - 21:19 / skift.com / Dawit Habtemariam
Choice Hotels launched a bid Tuesday to acquire Wyndham Hotels & Resorts for $90 a share – a hostile offer that would create the largest budget hotel franchise in North America. Wyndham has rejected Choice’s bid.
This is only Choice’s latest move – its run at Wyndham goes back to the spring. Both Choice and Wyndham released lengthy documents Tuesday that detailed their version of events.
Choice says it is making a fair offer; Wyndham is stressing the offer was unsolicited and undervalues its business.
Below is a timeline based on their documents and Skift’s reporting.
On April 28, Choice made its first offer to acquire Wyndham. The bid: $80 per share with 40% in cash and 60% in Choice shares.
On May 9, Wyndham responded to Choice’s first offer, stating it “substantially undervalued Wyndham. relative to its standalone prospects,” according to a document released by Wyndham on Tuesday.
On May 15, Choice raised its asking price to $85 per share, with 55% in cash and 45% in Choice shares. Choice also offered Wyndham the option to “participate in the merged company’s governance,” it said in a document released Tuesday.
On May 29, Wyndham rejected the offer, stating it would “undervalue Wyndham and put the value of a combined company at risk given the high level of contemplated debt.”
News of the proposed merger leaked to the public. On May 23, the Wall Street Journal reported that Choice was seeking to buy Wyndham. That news “really impacted the price of both companies’ shares,” said Choice Hotels CEO Patrick Pacious on CNBC Tuesday.
Analysts doubted Choice was serious about merging with Wyndham. Choice and Wyndham declined to confirm the report.
On June 22, Wyndham and Choice’s respective Board Chairs and CEOs meet to discuss the second offer.
Choice surprised analysts with a business update forecasting higher-than-expected earnings, suggesting it’s going to make a significant financial move. Wyndham shares subsequently soared in value.
On July 27, Wyndham reported weaker profits for the second quarter and pointed to a “moderation” in leisure travel growth.
Choice Hotels executives stated during an earnings call they are open to pursuing mergers and acquisitions to expand their hotel empire.
“We’re always looking for M&A [mergers and acquisitions] that fits the 2 litmus tests that we talked about, improving the ROI [return on investment] for the owners and growing the brands for the shareholders,” said Pacious during a conference call.
On August 21, Choice submitted a third written offer, increasing the price to $90 per share.
Wyndham said Tuesday it rejected the third offer with the conclusion that “the proposal continues to substantially undervalue Wyndham relative to future growth prospects”
Five travel tech startups have announced fundraises this week totaling more than $144 million.
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