Choice Hotels International on Tuesday formally launched a hostile bid to acquire Wyndham Hotels & Resorts, the company announced. Choice confirmed its ownership of 1.5 million shares of Wyndham stock—valued at more than $110 million—and said it is preparing to nominate a slate of candidates to Wyndham's board of directors, "in order to present its compelling proposal directly to Wyndham."
Choice in October publicly offered to acquire Wyndham in a $7.8 billion cash-and-stock deal, and revised the offer in November. Wyndham's board rejected both offers, calling them undervalued and citing possible objections from federal regulators.
Choice has not changed the terms of its deal from its November offer, it said.
Choice said it had already met with the U.S. Federal Trade Commission "on a voluntary basis to discuss the pro-competitive nature of the transaction," and would file with the FTC the necessary notifications and reports to move ahead with the acquisition, thus "starting the clock" on the transaction. Choice in a statement said it "is committed to completing the transaction within one year."
"While we would have preferred to come to a negotiated agreement, the Wyndham Board's refusal to explore a transaction has left us with no choice but to take our proposal directly to Wyndham's shareholders," Choice president and CEO Patrick Pacious said in a statement. "Wyndham chose to publicly reject our last proposal without any engagement even after we addressed their concerns, including adding significant regulatory protections for their shareholders."
Confirming November reports that it would seek to nominate directors to serve on Wyndham's board, Choice said it is "actively" pursuing candidates and "intends to nominate a slate of directors" at Wyndham's 2024 annual shareholder meeting," the company said.
[Update, Dec. 12] Wyndham in a statement said its board would "carefully review and evaluate the offer to determine the course of action that it believes is in the best interests of Wyndham and its shareholders" but noted "the offer looks to be unchanged from Choice's previous highly conditional offer the Board reviewed and rejected."
Wyndham said the board would advise shareholders of its recommendation regarding the offer within 10 business days.
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