Following a monthslong fight to acquire its peer Wyndham Hotels & Resorts, Choice Hotels International is walking away from the proposed deal after support for its exchange offer fell flat.
In a Monday statement — following the Friday deadline for Wyndham stockholders to tender their shares into Choice’s exchange offer — the company said “the support from Wyndham stockholders was significant” but “not sufficient for Choice to conclude” a deal.
Choice announced it will not extend its exchange offer and is withdrawing its slate of director nominees that were set to stand for election for Wyndham board seats.
“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,” Choice said in a Monday release.
In a statement following Choice’s announcement, Non-Executive Chairman of the Wyndham Board of Directors Stephen Holmes said that the Wyndham Board is “pleased that Choice has ended its hostile pursuit and proxy contest.”
Wyndham’s President and CEO Geoff Ballotti added in the same release that Wyndham is focused on “moving ahead with the execution of its strategic plan […] and generating meaningful value” without “the unnecessary distraction of this situation and disruption to our business.”
Choice’s latest move is a turning point in a proposed deal that has been in the works since April, when Choice approached Wyndham’s board of directors privately with an acquisition proposal.
After months of private negotiations between the companies from April to September, and Wyndham’s disengagement from those discussions, Choice took its $7.8 billion bid public on Oct. 17.
Wyndham rejected that offer and also rejected Choice’s subsequent public exchange offer.
Amid the public back and forth between the companies, the Federal Trade Commission began a “Second Request” process, investigating antitrust risk surrounding the proposed merger.
Industry professionals — and Sen. Elizabeth Warren — expressed concern that the merger would create a monopoly if closed. Choice reiterated Monday that the “combination is pro-competitive, and approval would have been achievable in a customary timeframe.”
