After being rebuffed repeatedly by the Wyndham Hotels & Resorts board of directors, Maryland-based Choice Hotels International is taking its acquisition offer directly to Wyndham shareholders.
Its latest bid for Wyndham has a value of $90 per share, or about $7.8 billion, unchanged from an offer rejected by Wyndham’s board in October, and again in November. It is in the form of $49.50 in cash and 0.324 shares of Choice common stock per Wyndham share. The exchange offer would give Wyndham shareholders the choice to receive all cash, all shares or both.
Choice said its offer will expire March 8.
“While we would have preferred to come to a negotiated agreement, the Wyndham Board’s refusal to explore a transaction has left us with no choice but to take our proposal directly to Wyndham’s shareholders,” said Choice Hotels CEO Patrick Pacious. “Wyndham chose to publicly reject our last proposal without any engagement even after we addressed their concerns, including adding significant regulatory protections for their shareholders.”
Choice also disclosed Tuesday that it holds 15 million shares of Wyndham stock, with a market value of $110 million.
Choice has been courting Wyndham as an acquisition since April.
Wyndham’s board has cited a lengthy regulatory approval process with no guarantee the acquisition would be approved, potential franchisee churn and excessive leverage levels of a combined company in rejecting Choice’s bids.
A merger would bring together some of the best-known hotel brands, many in the budget category. Wyndham has 21 franchise brands, including Super 8, Days Inn, Howard Johnson, Ramada and La Quinta. Choice has 22 brands, including Comfort, Quality Inn, Rodeway Inn and EconoLodge. It gained nine brands after closing on its $675 million acquisition of Radisson.
Choice will hold a ribbon-cutting ceremony for its new headquarters in North Bethesda at Pike & Rose next week, relocating about 400 employees from its longtime headquarters in Rockville. Choice is also cutting 85 corporate jobs.
