Choice Hotels Offers Nearly $8 Billion for Wyndham Hotels & Resorts in Bid to Expand

         

Summary: Choice Hotels International is making an $8 billion bid to acquire rival chain Wyndham Hotels & Resorts, after negotiations broke off between the two companies. Choice Hotels is seeking shareholder approval for the deal, which includes a cash and stock offer at a 20% premium to Wyndham’s last closing price. The proposal allows Wyndham shareholders to choose between cash, stock, or a combination of both. Choice Hotels, with 7,500 hotels across 46 countries, aims to expand its portfolio by absorbing Wyndham’s nearly 9,300 hotels under brands like Days Inn and Ramada. Wyndham, which posted a profit of $355 million last year, has seen its shares rise over 170% since the start of the pandemic.

Choice Hotels International has announced its intention to acquire rival chain Wyndham Hotels & Resorts through a buyout worth almost $8 billion. The bid comes after negotiations between the two companies fell through. Choice CEO Patrick Pacious expressed disappointment over Wyndham’s decision to disengage, stating that both companies recognized the value opportunity of the potential transaction. Choice Hotels is now seeking shareholder approval to proceed with the deal.

Under the proposed acquisition, Choice Hotels will offer $49.50 in cash and 0.324 shares of Choice common stock for each Wyndham share. This represents a 20% premium to Wyndham’s last closing price. Shareholders will have the option to choose between cash, stock, or a combination of both. The deal, with a total value of around $7.8 billion, will also grant Wyndham two seats on the board of the combined company.

Choice Hotels initially made an offer of $80.00 per share to Wyndham in April, which was rejected. The offer was then raised to $85 per share and later increased to $90 per share during meetings between the chairs and CEOs of both companies. Regulatory approval and concerns over the value of Choice stock were cited by Wyndham as obstacles to the deal.

Choice Hotels, headquartered in Maryland, operates approximately 7,500 hotels in 46 countries. The company aims to expand its presence by acquiring Wyndham, which operates nearly 9,300 hotels worldwide under various brands such as Days Inn, Ramada, and Super 8. Wyndham, based in New Jersey, reported a profit of $355 million with $1.5 billion in revenue last year.

Like many others in the industry, Wyndham has been benefiting from increased travel in recent years. However, the travel boom has slightly cooled down this year, with people becoming more cost-conscious due to inflation. Wyndham’s shares have risen over 170% since the beginning of the pandemic. Upon news of the acquisition bid, Wyndham’s stock price jumped more than 15% to $82.40, while Choice Hotels’ shares dropped over 2%.

Tags: Choice Hotels International, Wyndham Hotels & Resorts, acquisition, shareholder approval, hospitality industry, hotel chains, buyout, stock offer, travel boom, share price

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