Wyndham Hotels & Resorts
said its board unanimously rejected an unsolicited proposal from
Choice Hotels International
to acquire the hotel chain for $90 a share in cash and stock.
Under the proposal—which would combine two of the biggest names in the budget-hotel sector —the $90 a share would be comprised of $49.50 in cash and the rest in stock. The proposal implied a total equity value for Wyndham of about $7.8 billion on a fully diluted basis. With the assumption of the company’s net debt, the proposed transaction was valued at about $9.8 billion.
Wyndham (ticker: WH) stock was gaining 7.6% to $74.33, while Choice Hotels (CHH) shares slid 5%.
Marriott International
(MAR) rose 1% as did
Hilton Worldwide Holdings
(HLT).
The latest proposal arrived publicly after Wyndham’s “decision to disengage from further discussions” with Choice after almost six months of conversations, according to a press release.
“While our Board would support a value-maximizing transaction, given the substantial, unmitigated embedded risks and value destruction potential presented by the proposed transaction, our Board determined it is not in the best interests of Wyndham shareholders,” Wyndham Chairman Stephen Holmes said in a press release.
“We have engaged with Choice and its advisors on multiple occasions to explore these risks,” he continued. “However, it became clear the proposed transaction likely would take more than a year to even determine if, and on what terms, it could clear antitrust review, and Choice was unable to address these long-term risks to Wyndham’s business and shareholders.”
Write to Emily Dattilo at [email protected]
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