Wyndham asks shareholders to reject Choice Hotels' offer

Choice Hotels International

18/12/2023 12:05

Dec 18 (Reuters) - Budget hotel operator Wyndham Hotels
& Resorts  WH.N  on Monday asked its shareholders to reject
Choice Hotels  CHH.N  takeover offer, citing regulatory review
of up to 24 months and lower valuation. 
    Last week, Choice launched a hostile bid for Wyndham after
the New Jersey-based hotel repeatedly rebuffed the overtures.
    "We are confident Wyndham can deliver long-term shareholder
value well in excess of the $85 per share offered by Choice by
continuing to execute on our existing business plan" said
Stephen Holmes, chairman of the Wyndham Board.
    The offer, valued at $7.8 billion in October, comes against
the backdrop of rising demand for budget hotels from travelers
looking for cheaper options due to still-high inflation.
    Wyndham also added that reception from franchisees has been
extremely negative. About 80% of Wyndham franchisee respondents
said a tie-up would hurt their business and about 60% said they
would terminate their contract in the event of a merger if they
had the option, according to a survey.
    Wyndham has repeatedly highlighted that the offer
undervalues its business and carries regulatory risks. It has
also pointed to a combined company's likely high debt level, as
well as the slower growth prospects of Choice's business.
    Choice has also said it was identifying director candidates
for nomination to Wyndham's board at its 2024 annual meeting and
would file documents with the Federal Trade Commission to kick
off a regulatory review process.



 (Reporting by Aishwarya Jain in Bengaluru; Editing by Sriraj
Kalluvila)
 ((Aishwarya.Jain@thomsonreuters.com;))