Choice Hotels International Inc. (NYSE: CHH) has launched a hostile bid to acquire Wyndham Hotels & Resorts Inc. (NYSE: WH), which previously rejected offers for a potential takeover.
Choice is using an exchange offer for Wyndham stock, appealing directly to Wyndham shareholders. Choice is repeating its previous offer of $49.50 in cash and 0.324 Choice share for each Wyndham share, resulting in a $7.8 billion transaction.
Choice also announced that it currently holds approximately 1.5 million shares of Wyndham common stock, valued in excess of $110 million and is filing a Hart-Scott-Rodino notification in order to begin the required regulatory review.
“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 President and 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. It remains our goal to reach a mutually agreeable transaction, and there is potential for additional value to be unlocked if Wyndham were to return to the negotiating table and provide due diligence. We look forward to meeting with Wyndham’s shareholders in the days and weeks ahead and to continuing the regulatory approval process we’re starting this week.”
Wyndham issued a statement acknowledging its receipt of the exchange offer, noting its board of directors “will carefully review and evaluate the offer to determine the course of action that it believes is in the best interests of Wyndham and its shareholders.” The company also pointed out that the “offer looks to be unchanged from Choice’s previous highly conditional offer the Board reviewed and rejected” and added it would “advise shareholders of its recommendation regarding the offer within ten business days by making available to shareholders and filing with the U.S. Securities and Exchange Commission a recommendation statement on Schedule 14D-9. Wyndham shareholders are urged not to take any action with respect to the offer until the Board announces its recommendation.”
Photo courtesy of Wyndham
