Choice Hotels is abandoning its hostile $8 billion takeover bid for Wyndham Hotels & Resorts.
Choice said Monday that while it received support from some Wyndham shareholders, it wasn’t sufficient enough for the company to conclude that a deal could be done, particularly when taking into account the Wyndham board’s opposition to a combination.
There was also some resistance from hotel franchisees to the deal.
Choice launched a hostile takeover offer for Wyndham in December after repeated attempts to reach a deal with the rival hotel chain were rebuffed. Its exchange offer to shareholders of Wyndham, which runs Days Inn, La Quinta, Ramada and a host of other brands, was the same as its last bid to company management, which was $49.50 in cash and 0.324 shares of Choice common stock per Wyndham share.
Choice’s exchange offer expired on Friday. The company also said Monday that it was withdrawing its slate of director nominees for Wyndham’s board.
“Choice intends to continue focusing on its standalone strategy, which the company is confident will create significant long-term value for its stockholders and franchisees,” it said in a prepared statement.
“The Wyndham board is pleased that Choice has ended its hostile pursuit and proxy contest, following the expiration of its unsolicited exchange offer,” Wyndham Chairman Stephen Holmes said in a news release. “We are confident in Wyndham’s standalone strategy and growth prospects under the leadership of our proven management team. The Board remains committed to acting in the best interests of our shareholders and driving superior long-term value creation.”
Choice had been trying to work out a deal for Wyndham, based in Parsippany, New Jersey, for some time, but had been held at arm’s length. In October Wyndham rejected an unsolicited $8 billion buyout offer from Choice. At the time, Wyndham, called the proposal “opportunistic” and said that it undervalued the company’s growth potential. The offer was rejected unanimously by its board.
Holmes also said in October that Choice’s bid was “subject to significant business, regulatory and execution risk,” and that Choice had been unable to address Wyndham’s concerns.
The Biden administration has been much more aggressive than previous administrations when it comes to antitrust reviews, regardless of the economic sector.
Choice Hotels International Inc., which is based in Rockville, Maryland, runs about 7,500 hotels in 46 countries. It was seeking to absorb a much larger chain in Wyndham, which operates more than 9,000 hotels that also include Howard Johnson, Super 8 and Travelodge.
Shares of Choice rose nearly 4% in midday trading, while Wyndham’s stock climbed slightly.
