In its latest move to acquire Wyndham Hotels & Resorts, Choice Hotels International is preparing to nominate directors to Wyndham’s board, Reuters reported Monday.
Choice Hotels has invested in Wyndham shares in the open market, becoming a Wyndham shareholder and, in turn, gaining the right to nominate directors to the Wyndham board come January, according to Reuters.
The move by Choice is likely an effort to end the stalemate between itself and Wyndham following Choice’s public bid to acquire its peer and Wyndham’s continuous rejections of the proposal.
The Wyndham board is the decision maker behind the company’s continued rejection of Choice’s $7.8 billion public acquisition bid, and the board has vehemently rejected Choice’s offering several times since it was first made in October. Wyndham claims its shareholders stand to be negatively affected by the deal, though Choice argues the opposite, saying the deal would benefit both sides.
Wyndham’s most recent public rejection came on Nov. 21 after the company received a letter from its peer — what it called “Choice's first communication in a month since its public disclosure of its unsolicited proposal” — in which Choice had not raised its offering price.
Wyndham pointed out that, based on Choice’s current share price, its latest proposal offers a value of $86 per share, a value $4 lower than when the bid was originally made.
“Choice continues to ignore our major concerns around value,” Chairman of the Wyndham Board of Directors Stephen Holmes said in a statement.
If Wyndham’s rejection continues, and Choice does nominate directors to Wyndham’s board, the election of directors at Wyndham's annual shareholder meeting in the spring could turn into a referendum for investors on whether negotiations should take place, according to Reuters. Reuters also reported that Choice has already begun interviewing potential board member nominees.
When asked if it could verify Reuters’ report, a Choice spokesperson told Hotel Dive: “We are committed to reaching a transaction with Wyndham and we intend to pursue all paths available to us to get there.”
