Choice Hotels International has announced plans to initiate an exchange offer to acquire Wyndham Hotels & Resorts, intending to present its proposal directly to Wyndham shareholders. Despite its preference for a negotiated agreement, Choice is taking this approach due to Wyndham’s board’s refusal to explore a transaction. Choice believes that a pro-competitive transaction with Wyndham would benefit shareholders, franchisees, guests, and associates of both companies.
Exchange Offer Initiation
- Choice Hotels is set to commence an exchange offer to acquire Wyndham Hotels & Resorts, directly engaging with Wyndham shareholders.
- Choice asserts that a transaction with Wyndham is pro-competitive and would generate value for shareholders of both companies, as well as provide benefits to franchisees, guests, and associates.
Current Shareholding and HSR Filing
- Choice currently holds approximately 1.5 million shares of Wyndham common stock valued at over $110 million.
- The company is filing the Hart-Scott-Rodino (“HSR”) notification to initiate the necessary regulatory review.
Unsuccessful Negotiation Attempts
- Despite attempts to negotiate, the Wyndham board’s refusal to explore a transaction has led Choice to pursue the exchange offer directly.
- Choice reportedly plans to nominate candidates to Wyndham’s board, but Wyndham has not provided immediate comment on this development.
Previous Rejection of Proposal
- In October, Choice presented a proposal to acquire Wyndham for approximately $7.8 billion in cash and stock, but Wyndham’s Board of Directors unanimously rejected the bid.
Unfavorable Response to Terms of Potential Merger
- On November 14, Choice representatives outlined the terms of a potential merger, but Wyndham’s financial and legal advisors deemed the parameters not in the best interests of the company and its shareholders, considering it “a step backward.”
- The move by Choice reflects its commitment to pursuing the acquisition of Wyndham Hotels & Resorts, despite the challenges encountered in reaching a negotiated agreement with Wyndham’s board.