Wyndham Strongly Rejects Choice Hotels’ Hostile Bid But Leaves Door Open
26.10.2023 - 16:09
/ skift.com
/ Sean Oneill
/ Stephen Holmes
Wyndham’s executives talked at length Thursday about why they wouldn’t accept the unsolicited bid from Choice Hotels – a $9.8 billion buyout offer after assuming debt.
“With no organic growth, a less vibrant loyalty program, and virtually no international capabilities in Choice’s platform, we are, frankly, not surprised [Choice made a hostile bid to merge],” said Stephen Holmes, chairman of Wyndham’s board. “Our business offers a medicine cabinet full of remedies.”
Wyndham released a presentation outlining why it believes it would be smarter to go it alone. (Embedded below.)
But Wyndham execs didn’t slam the door shut. “The ball is really in their court,” Holmes said.
Choice Hotels on Wednesday called on Wyndham to return to merger talks.
“Their plan seems to be to put out repetitive press releases and see if they can turn the water enough to make it interesting for us,” Wyndham’s Holmes said. “That’s a bit of a desperate plan.”
Wyndham executives highlighted “execution risk,” a lack of cash up-front, and Choice’s alleged weaker performance as its top hesitations about a deal.
“Asymmetrical” risks, including antitrust review
Wanting more cash upfront
But Wyndham is open to a transaction with the right partner
In surprising candor, Wyndham’s Holmes — who was chairman and CEO from the company’s birth in 2006 until 2018 — admitted that overtures for a merger with Choice had been floated for nearly the entire life of Wyndham as a hotel group.
Wyndham has begun responding with tactics that will make it tougher to get a deal done.
Harsher talk may encourage Wyndham franchisees and stockholders to reject any offer — even a more generous one.
“It’s hard for us to say no more than we’ve already said no,” Holmes said.
Already, investors are skeptical a deal will happen given how they are pricing the two companies’ stocks, as Skift Research has explained.
However, perhaps another player, like Blackstone or IHG, may make a move.
“When I first heard from the other side, their question was, ‘Are you prepared to transact?'” Holmes said. “And I said, “Well, I’m always prepared to transact if it’s in the best interest of our shareholders.'”
There’s nothing quite as exciting in the corporate world than an unwelcome takeover offer. On this episode of the Skift Travel Podcasts, Skift’s hotel experts deal with the drama.