by Donald Wood
Last updated: 10:15 AM ET, Mon December 18, 2023
Wyndham Hotels & Resorts announced that its Board of
Directors unanimously determined the unsolicited exchange offer from Choice
Hotels International to acquire all outstanding shares of the hospitality
company is not in the best interests of its shareholders.
Following a comprehensive review with outside financial and
legal advisors, Wyndham officials unanimously recommended that shareholders not
tender any of their shares into the offer from Choice.
Citing regulatory review of up to 24 months, lower valuation,
and a negative reception from franchisees, Wyndham unveiled a presentation
detailing the unprecedented antitrust risks the offer from Choice presents shareholders.
“Choice has, once again, failed to address the major value
gap and risks of their offer – which remains virtually unchanged from the terms
outlined in their previous unsolicited proposal,” Wyndham's Chairman of the
Board Stephen P. Holmes said.
“The core issues we have articulated remain the same: a
likely prolonged regulatory review period of up to 24 months with an uncertain
outcome; the pure inadequacy of the offer from a valuation standpoint,
including the significant equity component of Choice stock; and the lack of
consideration for Wyndham's superior, standalone growth prospects,” Holmes continued.
Last week, Choice announced plans to commence an exchange
offer to acquire Wyndham to present its proposal
directly to Wyndham shareholders. Choice continues to believe that a
transaction is “pro-competitive” and would generate value for shareholders, franchisees,
guests and associates of both companies.
In October, Choice outlined its new proposal to acquire
Wyndham for around $7.8 billion in cash and stock, but Wyndham announced its
Board of Directors unanimously
rejected the highly conditional, unsolicited stock-and-cash bid.
On November 14, Choice representatives sent a letter
outlining the terms of a potential merger, but Wyndham's financial and legal
advisors said the parameters are not in the best interests of the company and
its shareholders, calling it “a
step backwards.”
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