Wyndham Hotels & Resorts Board Urges Shareholders to Reject Choice Offer

19.12.2023 - 01:04 / travelpulse.com / Donald Wood

Wyndham Hotels & Resorts announced that its Board of Directors unanimously determined the unsolicited exchange offer from Choice Hotels International to acquire all outstanding shares of the hospitality company is not in the best interests of its shareholders.

Following a comprehensive review with outside financial and legal advisors, Wyndham officials unanimously recommended that shareholders not tender any of their shares into the offer from Choice.

Citing regulatory review of up to 24 months, lower valuation, and a negative reception from franchisees, Wyndham unveiled a presentation detailing the unprecedented antitrust risks the offer from Choice presents shareholders.

“Choice has, once again, failed to address the major value gap and risks of their offer – which remains virtually unchanged from the terms outlined in their previous unsolicited proposal,” Wyndham's Chairman of the Board Stephen P. Holmes said. 

“The core issues we have articulated remain the same: a likely prolonged regulatory review period of up to 24 months with an uncertain outcome; the pure inadequacy of the offer from a valuation standpoint, including the significant equity component of Choice stock; and the lack of consideration for Wyndham's superior, standalone growth prospects,” Holmes continued.

Last week, Choice announced plans to commence an exchange offer to acquire Wyndham to present its proposal directly to Wyndham shareholders. Choice continues to believe that a transaction is “pro-competitive” and would generate value for shareholders, franchisees, guests and associates of both companies.

In October, Choice outlined its new proposal to acquire Wyndham for around $7.8 billion in cash and stock, but Wyndham announced its Board of Directors unanimously rejected the highly conditional, unsolicited stock-and-cash bid.

On November 14, Choice representatives sent a letter outlining the terms of a potential merger, but Wyndham's financial and legal advisors said the parameters are not in the best interests of the company and its shareholders, calling it “a step backwards.”

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