Choice Hotels International announced that it will not pursue its hostile $7 billion bid to acquire Wyndham Hotels & Resorts. Choice also withdrew the eight nominees it had put forward as candidates for Wyndham’s board of directors.
Last week, Choice called on Wyndham shareholders to tender their shares to Choice’s exchange offer by March 8 to “send a clear message to Wyndham’s board of directors” in support of Choice’s bid. Instead, Choice said the level of support was “not sufficient” to continue with the bid.
In a statement, Choice said that “while the support from Wyndham stockholders tendering into the exchange offer was significant considering the number of investors structurally prevented from participating at this stage, it was not sufficient for Choice to conclude—particularly when taking into account the Wyndham board’s obvious continuing disinterest in a combination—that a path towards a transaction is available at this time.”
Wyndham’s board and management have opposed the deal since it was announced, calling it inadequate and too reliant on Choice stock, with an uncertain path to federal regulatory approval.
Even as it announced the end to the bid, Choice defended the deal, saying, “The progress made on the regulatory front confirmed Choice’s belief that the combination is pro-competitive, and approval would have been achievable in a customary timeframe.”
Choice also said it is enthusiastic about its “go-forward” strategy, which is expected to deliver another year of superior growth with projected adjusted EBITDA increasing approximately 10% at the midpoint of guidance, driven by:
• A unique revenue intense strategy delivering accelerated unit growth and higher royalty revenue per hotel. • A continued realization of the higher-than-expected synergies resulting from the Radisson Americas business integration. • Choice’s platform earnings potential, highlighted by the significant outperformance of the co-brand credit card program launched in April. • Choice’s continued international business earnings growth and global pipeline expansion. Image: Shutterstock
