Rockville-based Choice Hotels, whose $9.8 billion hostile takeover bid for Wyndham Hotels and Resorts was rejected by Wyndham’s board earlier this month, is pressing ahead with its proposed acquisition.
Choice has now called on Wyndham’s board to return to the table and engage in good faith discussions, “so that shareholders of both companies can benefit from the compelling combination.”
Choice’s interest in buying Wyndham became public Oct. 17, when Choice announced terms of its proposed acquisition. The public announcement came after Wyndham broke off talks after six months of negotiations.
Wyndham in turn publicly rejected the offer, citing the likelihood of a protracted regulatory approval process with no certain outcome, potential franchisee churn and excessive leverage levels for a combined company.
“Choice’s offer is underwhelming,” Stephen Holmes, chairman of the Wyndham board, said.
In Choice’s latest overture, it cites what it says has been feedback from outside of Wyndham’s board.
“We appreciate the positive feedback we have received since first making our proposal public, particularly the support from both companies’ shareholders and franchisees,” said Choice chief executive Patrick Pacious. “Both companies’ shareholders have expressed to us their understanding of the tremendous value this combination could deliver.”
Wyndham reiterated its belief that a merger is not in the best interest of shareholders in a Thursday morning earnings call with investors. Holmes called the offer “a desperate grab to solve Choice’s problems,” according to Bloomberg News.
Choice Hotels acquired Radisson for $675 million this year, gaining nine brands. A merger between Choice and Wyndham would create a company with some of the best-known hotel brands in the budget category.
Wyndham’s hotels include Super 8, Days Inn, Howard Johnson, Ramada and La Quinta. Choice’s brands include Comfort, Quality Inn, Rodeway Inn and EconoLodge.
