Choice Hotels has withdrawn its hostile $7.8 billion takeover bid for US rival Wyndham Hotels & Resorts after failing to gain enough backing from Wyndham’s shareholders.
Budget specialist Choice launched its initial unsolicited bid for Wyndham in October. But Choice’s original offer and a follow-up proposition were rejected by Wyndham’s board, which urged shareholders not to accept the deal.
Choice decided to withdraw its offer for Wyndham on Monday (11 March) and the company added that it now planned to “continue focusing on its standalone strategy”.
In a statement, Choice added: “While the support from Wyndham stockholders tendering into the exchange offer was significant considering the number of investors structurally prevented from participating at this stage, it was not sufficient for Choice to conclude – particularly when taking into account the Wyndham board's obvious continuing disinterest in a combination – that a path towards a transaction is available at this time.”
Choice had nominated a “slate” of new directors to replace Wyndham’s current board in January but these nominations have also now been withdrawn.
Following Choice’s statement, Stephen Holmes, chairman of Wyndham’s board, added: “The Wyndham board is pleased that Choice has ended its hostile pursuit and proxy contest, following the expiration of its unsolicited exchange offer.
“We are confident in Wyndham's standalone strategy and growth prospects under the leadership of our proven management team. The board remains committed to acting in the best interests of our shareholders and driving superior long-term value creation.”
Before Choice’s decision to abandon the takeover, Wyndham said it had written to shareholders urging them not to support Choice’s nominees for the board.
“Wyndham has a clear path to deliver shareholder value substantially in excess of Choice's inadequate and uncertain offer,” said Wyndham in a statement.