Choice Hotels’ Hostile Bid for Wyndham: A Battle for Shareholders’ Approval
In a significant development in the hospitality industry, Choice Hotels International Inc. has launched an aggressive move to acquire Wyndham Hotels & Resorts Inc. This bid comes amidst a backdrop of opposition from Wyndham’s board, setting the stage for a contentious takeover battle.
The Buyout Offer
On November 14, 2023, Choice Hotels extended a private proposal to Wyndham, offering a mix of cash and stock valued at $90.00 per share. This offer included $49.50 in cash and 0.324 shares of Choice common stock for each share of Wyndham stock. The deal also proposed granting Wyndham two seats on the combined company’s board. This offer represents a 26% premium over Wyndham’s 30-day volume-weighted average closing price as of October 16, 2023, and an 11% premium to its closing price.
Choice Hotels’ Appeal to Shareholders
In a bold move, Choice Hotels urged Wyndham shareholders to accept this unsolicited buyout offer. This direct appeal to shareholders comes despite opposition from Wyndham’s board, highlighting the intensity of Choice Hotels’ acquisition strategy.
Wyndham’s Response
In contrast, Wyndham Hotels & Resorts has asked its shareholders to reject Choice Hotels’ takeover offer. The rejection is based on concerns about a prolonged regulatory review of up to 24 months and perceived undervaluation in the proposal.
Hostile Bid Tactics
On December 12, Choice Hotels escalated its efforts by launching a hostile bid for Wyndham. This aggressive strategy indicates Choice Hotels’ determination to push through the acquisition, even in the face of resistance from Wyndham’s board. The hostile bid represents a significant step in what could be a protracted board battle between the two companies.
Implications for the Hospitality Industry
The potential acquisition of Wyndham by Choice Hotels could significantly reshape the landscape of the hospitality industry. The combined entity would create a major player in the budget hotel sector, potentially altering competitive dynamics and impacting both consumers and shareholders.
The unfolding drama between Choice Hotels and Wyndham Hotels & Resorts underscores the complex nature of corporate acquisitions, especially in cases involving unsolicited bids and hostile takeover attempts. The outcome of this bid will depend largely on the response of Wyndham’s shareholders and the decisions made by regulatory bodies overseeing the potential merger. As the situation evolves, it serves as a compelling case study in corporate strategy and shareholder relations within the hospitality industry.
