Choice Hotels rejects its $8 billion takeover bid for Wyndham after being repeatedly rebuffed – The Associated Press

Choice Hotels is launching a hostile takeover bid for Wyndham Hotels & Resorts after repeated attempts to reach an agreement with the rival hotel chain were rebuffed.

Choice Hotels said Tuesday that its exchange offer to shareholders of Wyndham, which operates Days Inn, La Quinta, Ramada and a host of other brands, is consistent with its last offer to management, which was $49.50 in cash and 0.324 Choice shares of common stock per Wyndham share. The exchange offer gives Wyndham shareholders the opportunity to choose whether they would like to receive all cash, all shares, or a combination of both.

The offer puts the value of the deal for Wyndham, the larger of the two chains, at about $8 billion.

“Although we would have preferred to reach a negotiated agreement, the Wyndham board’s refusal to explore a transaction has left us no choice but to present our proposal directly to Wyndham shareholders,” said Choice CEO Patrick Pacious , in a prepared statement. “Wyndham chose to publicly reject our final proposal without any commitment, even after we addressed their concerns, including imposing significant regulatory protections for their shareholders.”

Pacious said Choice continued to seek a “mutually acceptable transaction” and said that was still possible, with the possibility that “additional value would be unlocked if Wyndham returned to the negotiating table and performed due diligence.” “.

Pacious said the company will meet with Wyndham shareholders in the coming days and weeks and that it will begin the regulatory approval process this week.

Choice has been trying to negotiate a deal for Wyndham for some time, but has been kept at arm’s length. In October, Wyndham rejected an unsolicited $8 billion takeover offer from Choice. At the time, Wyndham called the proposal “opportunistic” and said it undervalued the company’s growth potential. The offer was unanimously rejected by the board.

Wyndham Chairman Stephen Holmes also said in October that Choice’s offer was “subject to significant commercial, regulatory and execution risks” and that Choice had been unable to address Wyndham’s concerns.

Choice said it floated the offering after six months of negotiations failed. The company made a private offer to Wyndham in mid-November that called for $49.50 in cash and 0.324 shares of Choice for each Wyndham share. It also offered Wyndham two seats on the combined company’s board. Wyndham rejected the proposed offer last month.

Choice said Tuesday that the company remains willing to offer two seats on the combined company’s board, along with a reverse termination fee consistent with terms in its November proposal.

Wyndham, based in Parsippany, New Jersey, said in a news release Tuesday that its board will review Choice’s offer to determine a course of action it believes best serves the company and its shareholders.

Wyndham urges its shareholders not to take any action until the board announces its recommendation.

The exchange offer will expire on March 8, 2024, unless extended or terminated. Choice said it was committed to completing the transaction within a year.

Choice said it currently holds about 1.5 million shares of Wyndham Hotels & Resorts Inc., valued at more than $110 million. It is planned to nominate a number of directors to Wyndham’s Board of Directors at Wyndham’s 2024 Annual General Meeting.

Wyndham made a profit of $355 million on revenue of $1.5 billion last year.

Hotels have seen a surge in business in recent years. A surge in travel has led to problems at airports and a shortage of pilots. That has cooled somewhat this year as people have become more cost-conscious about their travels due to inflation and after spending more freely for more than a year.

Choice Hotels International Inc., based in Rockville, Maryland, operates approximately 7,500 hotels in 46 countries. The company plans to acquire a much larger Wyndham chain that operates more than 9,000 hotels, including Howard Johnson, Super 8 and Travelodge.