Two days before the scheduled expiration of its exchange offer, Choice Hotels International on Wednesday called upon Wyndham Hotels & Resorts' shareholders to tender their shares to "send a clear message to Wyndham's board of directors" in support of Choice's hostile bid for the company.
Depending on how many Wyndham shareholders tender their shares by 5 p.m. Eastern time Friday, Choice said it would either extend or terminate its exchange offer and "evaluate next steps" concerning its nomination of a slate of candidates for Wyndham's board.
After failing to reach a deal earlier in 2023, Choice in December launched a hostile bid for the company, offering Wyndham shareholders $49.50 in cash and 0.324 shares of Choice per share, setting a March 8 deadline for the exchange. Choice in a Wednesday statement noted that tendering shares by Friday is not binding, and Wyndham shareholders will have the opportunity to withdraw any shares tendered should Choice extend the exchange offer, which it would do by 9 a.m. Eastern time March 11.
Wyndham's board and management have opposed the deal since it was announced, calling it inadequate and too reliant on Choice stock, with a rocky path of federal regulatory review. Choice on Wednesday said it in recent months has "made significant progress addressing regulatory requests and offered above-market regulatory protections, including a significant reverse termination fee and ticking fee," adding it has "spoken to the holders of a significant number of Wyndham's shares, and the resounding feedback from stockholders is that they would like to see Choice and Wyndham genuinely explore a value-maximizing transaction in a constructive manner."
Choice has not increased its offer since publicly announcing the $7.8 billion offer in October. On Wednesday, Choice said that while it "is committed to the transaction and would like to work expeditiously to deliver a value-maximizing transaction to Wyndham stockholders, Wyndham's recent quarterly results give Choice limited confidence in further enhancing its proposal without proper due diligence."
Choice in January named eight nominees to Wyndham's board of directors. They would stand for election at Wyndham's 2024 annual meeting of shareholders, which has not yet been scheduled.
Wyndham did not immediately return a request for comment Wednesday.