Choice Hotels abandons its attempted hostile takeover of Wyndham Hotels & Resorts, Incorporated, as the exchange offer to acquire all of the issued and outstanding shares of Wyndham expired on Friday, March 8, 2024, which would have led to a combined portfolio of 42 brands with greater than 16,000 hotel and resort properties.
Choice Hotels Abandons Hostile Takeover of Wyndham
Wyndham Hotels & Resorts, Incorporated rejected an unsolicited takeover bid by Choice Hotels International, Incorporated on Tuesday, October 17, 2023 to acquire all of the outstanding shares of Wyndham at a price of $90.00 per share because the proposal presented an “unacceptable risk to Wyndham shareholders” and was “underwhelming”.
Almost a year elapsed since Choice Hotels International, Incorporated launched its series of attempts to acquire Wyndham Hotels & Resorts, Incorporated.
“Since beginning this process in April 2023, Choice has attempted to engage in good-faith negotiations with Wyndham through numerous different avenues, including increasing the proposed offer multiple times and expressing an openness to further enhancing the offer with due diligence, offering a one-way NDA to share its confidential information with Wyndham, and offering above-market regulatory protections”, according to this official press release from Choice Hotels International, Incorporated. “Given Wyndham’s refusal to constructively and substantively engage on terms, Choice took the extraordinary step of launching the exchange offer to initiate the regulatory review process and engage with Wyndham stockholders. While the support from Wyndham stockholders tendering into the exchange offer was significant considering the number of investors structurally prevented from participating at this stage, it was not sufficient for Choice to conclude — particularly when taking into account the Wyndham board’s obvious continuing disinterest in a combination — that a path towards a transaction is available at this time. As such, Choice has decided not to extend the exchange offer and is withdrawing its slate. Choice intends to continue focusing on its standalone strategy, which the Company is confident will create significant long-term value for its stockholders and franchisees.”
Unsurprisingly, the official press release from Wyndham Hotels & Resorts, Incorporated had a different tone: “The Wyndham Board is pleased that Choice has ended its hostile pursuit and proxy contest, following the expiration of its unsolicited exchange offer,” said Stephen P. Holmes, who is the chairman of the board alt Wyndham. “We are confident in Wyndham’s standalone strategy and growth prospects under the leadership of our proven management team. The Board remains committed to acting in the best interests of our shareholders and driving superior long-term value creation.”
Final Boarding Call
The acquisition of the franchise business, operations, and intellectual property of Radisson Hotel Group Americas by Choice Hotels International, Incorporated — which includes greater than 68,000 hotel rooms in 624 hotel and resort properties under nine brands in the United States, Canada, Latin America, and the Caribbean — for approximately $675 million was completed on Thursday, August 11, 2022.
To be honest, both lodging companies have a surfeit of mediocre brands between them that overlap, in my opinion: Econo Lodge, Rodeway Inn, and Suburban Studios for Choice Hotels; and Travelodge, Super 8, and Days Inn for Wyndham, as an example. I cannot tell you how many times I have confused Rodeway Inn and Travelodge over the years — and I have stayed at properties of both hotel brands.
The integration of both lodging companies likely would have led to the reduction or consolidation of those mediocre brands, in my opinion…
…but the question remains: could the combined lodging company have been more of a veritable competitor against the other multinational lodging companies worldwide?
We will likely never know…
All photographs ©2017 and ©2020 by Brian Cohen.
