Choice Hotels Offers to Buy Wyndham for $7.8 Billion, Wyndham Rejects Bid
Photo Caption: The Wyndham Orlando Conference Center Celebration, owned by AD1 Global, in Florida. Source: Wyndham.
Skift Take
This is in essence a hostile takeover, and the acquisition may not go through. But if it does, it will create the largest budget hotel player in North America.
Choice Hotels on Tuesday made a hostile bid to acquire all the outstanding shares of competitor Wyndham Hotels & Resorts at a price of $90 a share, assuming a $7.8 billion valuation. Wyndham publicly turned down the unsolicited offer from Choice Hotels.
The potential deal would create the largest franchisor of budget hotels in North America. Together, they would run about 16,360 properties from budget to luxury.
Under the proposal, Wyndham shareholders would receive $49.50 in cash per share and 0.324 shares of Choice common stock per share.
Wyndham responded on Tuesday that Choice Hotel's hostile offer undervalued Wyndham's growth potential and involved risks. Choice Hotels probably doesn't have much room to bid higher without upsetting its own shareholders, said analysts at Truist in a flash report.
The Case for a Merger of Hotel GroupsChoice Hotels president and CEO Patrick Pacious made a concise argument on CNBC on Tuesday:
