Wyndham Hotels & Resorts Board Advises Against Accepting Choice Hotels Takeover Offer

Wyndham Hotels & Resorts, a leading hospitality company, has made a critical announcement regarding its future. The company’s Board of Directors, after thorough deliberation with external financial and legal advisors, has unanimously concluded that the unsolicited exchange offer from Choice Hotels International to acquire all outstanding shares of Wyndham is not favorable for its shareholders.

This decision comes after a detailed evaluation, with Wyndham officials strongly advising shareholders against tendering their shares in response to Choice Hotels’ offer. This recommendation reflects the Board’s consensus on several key issues. They emphasize the potential for a prolonged and uncertain regulatory review period, possibly extending up to 24 months. Additionally, the Board highlighted concerns about the valuation of the offer, particularly the significant equity component involving Choice stock. The Board also took into account Wyndham’s robust independent growth prospects, which they believe are not adequately considered in the offer.

Choice Hotels, on the other hand, remains confident in the benefits of the proposed acquisition. Last week, Choice announced its intention to initiate an exchange offer directly to Wyndham shareholders, maintaining that the merger would be “pro-competitive” and create value for shareholders, franchisees, guests, and associates of both companies.

In October, Choice presented a new proposal to acquire Wyndham for approximately $7.8 billion in cash and stock. However, this bid was unanimously rejected by Wyndham’s Board as highly conditional and unsolicited. Despite the rejection, Choice sent a letter on November 14 detailing the terms of a potential merger. Wyndham’s advisors, however, deemed these terms unsatisfactory for the company and its shareholders, describing the proposal as “a step backwards.”

This standoff reflects the complexities and strategic considerations in the hospitality industry, especially in high-stakes mergers and acquisitions. Wyndham Hotels & Resorts’ rejection of Choice Hotels International’s offer underscores the company’s commitment to its independent growth trajectory and the prioritization of its shareholder interests.