Choice Hotels International has launched a $7.8 billion deal to buy US rival Wyndham Hotels & Resorts.
The total value of the full deal would be around $9.8 billion including Wyndham’s debt, with investors being offered $90 per share in cash and Choice stock.
Choice said it had made its offer public on Tuesday (17 October) following Wyndham's decision to "disengage from further discussions with Choice, following nearly six months of dialogue". Choice representatives would not comment further at this time, a company spokesperson told BTN.
The proposal includes an offer of $90 per share to Wyndham shareholders through a mix of $49.50 in cash and 0.324 shares of Choice stock. This proposal includes a cash or stock option, meaning Wyndham shareholders could choose cash, stock or a combination of both.
Choice said that the value of its bid represents a 26 per cent premium on Wyndham’s average share price over the past 30 days.
Patrick Pacious, Choice’s CEO and president, said: “A few weeks ago, Choice and Wyndham were in a negotiable range on price and consideration, and both parties have a shared recognition of the value opportunity this potential transaction represents.”
Pacious added that the hotel company was "surprised and disappointed" at Wyndham's decision to disengage privately from negotiations.
“While we would have preferred to continue discussions with Wyndham in private, following their unwillingness to proceed, we feel there is too much value for both companies' franchisees, shareholders, associates and guests to not continue pursuing this transaction," he said.
Pacious also stressed the potential “long-term organic growth” for both companies through the proposed acquisition. Choice owns brands such as Sleep Inn, Quality Inn, Park Inn and Comfort, as well as Radisson properties in the Americas, which it purchased from Radisson Hotel Group last year.
Wyndham did not immediately make a public statement following the announcement of Choice’s bid.
The proposed acquisition follows whispers this summer of a potential acquisition of Wyndham by Choice.
Choice on Tuesday said it sent an initial letter proposing to acquire Wyndham in April 2023. The original deal was set at $80 per share, comprising of 40 per cent cash and 60 per cent in Choice shares. Wyndham rejected that proposal and refused to engage in further discussions, according to Choice.