Choice Hotels International remains persistent in its efforts to buy Wyndham Hotels & Resorts, making another “unsolicited” public acquisition offer to its peer on Tuesday morning. Hours after making the bid, Wyndham fired back, claiming the latest offer “appears unchanged.”
Choice’s exchange offer maintains the previously proposed offer numbers, which equated to roughly $7.8 billion, or $90 per share for all outstanding Wyndham shares, when Choice first made it in October. However, based on Choice’s current share price, the bid currently offers a value of $86 per share, Wyndham said in its Tuesday response to Choice.
Wyndham responded with its own public statement, saying 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 the company and its shareholders. But, Wyndham added, the offer looks to be “unchanged from Choice’s previous highly conditional offer the Board reviewed and rejected.”
Choice said it has made the latest offer in order to “present its compelling proposal directly to Wyndham shareholders,” whom it previously said the deal would positively impact.
“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,” Choice President and CEO Patrick Pacious said in a statement. “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.”
In its response statement, Wyndham said that Choice still has not addressed several of its concerns regarding its shareholders, including the “asymmetrical risk to Wyndham shareholders given the uncertainty around antitrust approval.”
The company said it also still fears its shareholders are being undervalued — what some experts say is a driving force behind Wyndham’s continued rejection.
Despite the monthslong stalemate, Choice previously told Hotel Dive it is “committed to reaching a transaction with Wyndham and we intend to pursue all paths available to us to get there.”
One possible path is a takeover of the Wyndham board. Reuters reported in late November that Choice is preparing to nominate directors to Wyndham’s board by snapping up enough Wyndham shares in the open market to gain the right to nominate directors come January.
Choice confirmed those plans in the Tuesday statement, saying it’s actively identifying, evaluating and interviewing director candidates to nominate to Wyndham's board at Wyndham's 2024 Annual Shareholder Meeting, likely to be held in May.
Choice also announced that it currently holds approximately 1.5 million shares of Wyndham common stock, valued at more than $110 million.
Wyndham said that ownership comes out to be less than 1.7% of Wyndham common stock, though, and noted that Choice is restricted from purchasing additional shares without antitrust approval.
But Choice continues to pursue all paths to an acquisition, and that means filing a Hart-Scott-Rodino notification in order to begin the required regulatory review.
The HSR is a federal premerger notification program that provides the Federal Trade Commission and the Department of Justice with information about large mergers and acquisitions before they occur.
