by Donald Wood
Last updated: 7:55 AM ET, Mon March 11, 2024
Choice Hotels International announced on Monday morning that
the company has terminated its hostile
takeover efforts of rival Wyndham Hotels & Resorts.
According to Reuters.com,
Choice said the decision was made after the hotel giant failed to earn enough
support from Wyndham shareholders. As a result, Choice also abandoned its
efforts to nominate independent director candidates to Wyndham's Board of
Directors.
Choice first announced the unprompted
cash-and-stock offer of around $8 billion to Wyndham in October 2023, but
the deal was met with resistance by Wyndham officials, who believed the pitch
was undervalued and created antitrust risks.
“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, Chairman of the Board. “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.”
In addition, Choice revealed its Board of Directors approved
an increase in the number of shares authorized under its share repurchase
program by five million. When added to the remaining number of available shares
authorized for repurchase, this results in a total authorization of
approximately 6.8 million shares.
Choice released a statement about its decision to abandon
its Wyndham
takeover plan:
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.
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