Choice Hotels International called on Wyndham Hotels & Resorts stockholders Tuesday to tender their shares into Choice’s exchange offer before the offer expires on March 8.
In a Tuesday statement, Choice said tendering the shares would “send a clear message to Wyndham's board of directors to constructively engage with Choice to reach a consensual agreement on the terms of a transaction.”
Choice and Wyndham have been at a monthslong stalemate after Choice made a $7.8 billion public offering to acquire its peer in October and then an exchange offer with similar terms in December, both of which Wyndham rejected. The offers followed Wyndham’s disengagement from months of private negotiations surrounding the combination.
While Wyndham has said in its public statements that Choice’s offer, as it stands, undervalues Wyndham shareholders and presents antitrust risk, Choice claims the offer “reflects a fulsome value.”
The proposed value of $90 per Wyndham share, Choice said in the Tuesday statement, represents “a multiple far in excess of what Wyndham has been able to achieve as a stand-alone business.”
Choice also noted that Wyndham has “refused to provide Choice access to any information that may have resulted in Choice's ability to improve its offer.”
In a Feb. 22 letter to shareholders, though, Non-Executive Chairman of the Wyndham Board of Directors Stephen Holmes said Choice’s claims that Wyndham has refused to engage on the proposed offer could not be “further from the truth.”
“We have engaged,” Holmes wrote in the letter. “What we have not done is roll over. Both as a Wyndham shareholder and as Wyndham’s Chairman, I am out of patience with this constant, false and misleading refrain.”
Wyndham could not be reached for comment on Choice’s Tuesday statement.
Depending on participation by Wyndham stockholders following the Tuesday plea, Choice will either extend or terminate the exchange offer, the company said. Choice noted that tendering shares into the offer does not obligate Wyndham stockholders to accept the offer as it stands.
Furthermore, Choice will “evaluate next steps” related to its nomination of eight individuals who will stand for election to Wyndahm’s board of directors.
The Federal Trade Commission is currently carrying out a “Second Request” regarding the deal. Hospitality industry leaders and, most recently, U.S. Senator Elizabeth Warren have urged the FTC to “closely scrutinize” the deal, claiming it would create a monopoly if closed.
