Wyndham board deems Choice Hotels' new offer "a step backwards"

Choice Hotels International

21/11/2023 13:29

Nov 21 (Reuters) - U.S. budget hotel operator Wyndham
Hotels and Resorts  WH.N  said on Tuesday a new letter from
Choice Hotels  CHH.N  "represents a step backwards" and the
terms outlined are not in the best interests of Wyndham or its
shareholders.  
    After months of negotiation between the budget hotel owners,
Wyndham's board received a letter from Choice CEO Patrick
Pacious on Nov. 14, seeking a restart to talks.
    Choice in the letter has not boosted its cash-and-stock
offer, currently worth $86 a share, which is down from $90 per
share offer after a decline in Choice's shares since the
takeover offer was made public in October. 
    "Choice continues to ignore our major concerns around value,
consideration mix, and asymmetrical risk to our shareholders
given the uncertainty around regulatory timeline and outcome,"
Stephen Holmes, Chairman of Wyndham's board said on Tuesday. 
    Pacious' latest letter proposes an about 6%
reverse-termination fee and a two-year deadline to obtain
regulatory approvals. 
    Wyndham said the deal would both create "a prolonged period
of limbo" for its employees and shareholders.
    Choice had made a $7.8 billion cash-and-stock acquisition
offer worth $49.50 in cash and 0.324 shares of its common stock
for each share of Wyndham. 
    It said it first approached Wyndham in April with an $80 per
share offer, which it later bumped up to $85 and then to $90 per
share. 
    A potential merger would have married Choice Hotels' brands
such as Econo Lodge, Quality Inn and Clarion with Wyndham's Days
Inn and Travelodge, offering inflation-hit customers a wide
choice of affordable hotels.

 (Reporting by Kannaki Deka in Bengaluru; Editing by Shailesh
Kuber)
 ((Kannaki.Deka@thomsonreuters.com;))