Choice Hotels International Inc. (CHH) has announced its plans to launch an exchange offer to acquire Wyndham Hotels & Resorts Inc. in a deal valued at $40.50 per share. The hotel group had initially made a hostile bid for Wyndham in October but expressed its preference for a negotiated agreement. However, as the Wyndham board has refused to engage in any deal discussions, Choice Hotels is left with no choice but to directly present its offer to shareholders.
Choice CEO Patrick Pacious stated, “Despite our efforts to address their concerns and even adding significant regulatory protections for their shareholders, Wyndham chose to publicly reject our last proposal without any engagement. Our primary motive is to reach a mutually agreeable transaction, and there is a potential for additional value to be unlocked if Wyndham were to return to the negotiating table and provide due diligence.”
In line with its acquisition plans, Choice Hotels currently holds 1.5 million shares of Wyndham’s common stock, valued at over $110 million. The company will file the Hart-Scott-Rodino notification later today to initiate the necessary regulatory review process.
The exchange offer is set to expire on Friday, March 8, 2024, unless extended or terminated. In the meantime, Wyndham’s stock has experienced a 1.6% increase early Tuesday and has gained 11% year-to-date, while the S&P 500 has seen a 20% increase.
This potential acquisition represents an important move for Choice Hotels International as it aims to expand its presence in the hospitality industry and deliver enhanced value to shareholders.