In a hostile bid to acquire Wyndham Hotels & Resorts, Choice Hotels International announced it has commenced an unsolicited exchange offer to acquire all outstanding shares of Wyndham common stock. The offer proposed by Choice appears unchanged from the terms outlined in a letter to Wyndham dated Nov. 14, 2023. Choice said it has acquired about 1.5 million shares of Wyndham common stock, valued at over $110 million, and would be bringing its offer directly to Wyndham’s shareholders.

In a statement, Choice said that Wyndham chose to publicly reject its last proposal without any engagement even after its concerns were addressed. Patrick Pacious, CEO of Choice, said it remains the company’s goal to reach a mutually agreeable transaction, and there is potential for additional value to be unlocked if Wyndham were to return to the negotiating table and provide due diligence. He said Choice looks forward to meeting with Wyndham’s shareholders in the days and weeks ahead and to proceeding with the regulatory approval process that it will be starting this week.

In October, Choice publicly offered to acquire Wyndham in a $7.8 billion cash-and-stock deal; it revised the offer in November. Wyndham’s board rejected both offers, calling them undervalued and citing possible objections from federal regulators.

Choice said it is actively identifying, evaluating and interviewing director candidates to nominate to Wyndham’s board and intends to nominate a slate of directors to the Wyndham board of directors at Wyndham’s 2024 annual shareholder meeting.

The exchange offer looks to be unchanged from Choice’s previous bid, which Wyndham reviewed and rejected based on the following concerns:

• The asymmetrical risk to Wyndham shareholders given the uncertainty around antitrust approval (if any) and the estimated 24-month timeline previously cited by Choice;

• The undervaluation of Wyndham’s superior, standalone growth prospects;

• The value of Choice shares relative to its growth prospects and further compromised by elevated levels of leverage that this deal would require.