Choice Hotels Calls on Wyndham to Engage in ‘Good Faith’ Sale Discussions

Choice Hotels International is calling on the board of directors of Wyndham Hotels & Resorts to engage in good faith discussions regarding a possible sale.

Earlier this month, Choice Hotels its proposal to acquire Wyndham for around $7.8 billion in cash and stock, a move that would create a budget hotel giant in the United States as demand for affordable hotels remains high, especially as inflation and recession impact consumer spending on travel.

After consulting financial and legal advisors, Wyndham’s Board of Directors reviewed Choice’s proposal and determined it was not in the best interest of shareholders to accept. Choice offered Wyndham $90 per share, comprised of 45 percent in stock and 55 percent in cash.

Choice believes its existing offer rewards Wyndham shareholders more than the present value that could be achieved through a standalone plan. From 2019 to 2022, Choice's unique strategy generated adjusted EBITDA growth of 28 percent compared to Wyndham's six percent.

Choice President and Chief Executive Officer Patrick Pacious released a statement on the company’s desire to engage in constructive conversation with Wyndham officials:

“We appreciate the positive feedback we have received since first making our proposal public, particularly the support from both companies' shareholders and franchisees. Through our conversations with these stakeholders, we are encouraged by their clear understanding of the natural fit of the two businesses and belief in the combined company's ability to drive greater shareholder returns, franchisee profitability, and strategic benefits. They, and others, share our perspective that a transaction is pro-competitive, has a clear path to completion, and creates a combined company with a strong free cash flow profile to support both rapid deleveraging and investments for growth.”

“We respect Wyndham's desire to achieve the best outcome for its shareholders, but that can't happen if Wyndham unilaterally ends our discussions. Both companies' shareholders have expressed to us their understanding of the tremendous value this combination could deliver. As recently as a few weeks ago, Wyndham prepared a critical information request list, on which both parties broadly aligned, to help Choice and Wyndham close any remaining value gaps. Wyndham then disengaged before any information was exchanged. We therefore strongly urge Wyndham to return to the discussions. Choice is ready to move expeditiously to negotiate binding terms, including mechanisms to provide market standard protections for Wyndham shareholders.”

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