Wyndham Hotels & Resorts has rebuffed Choice Hotels International’s latest buyout attempt, with Wyndham chairman Stephen Holmes calling Choice’s most recent outreach “a step backwards.”
Holmes in a memo on Tuesday criticized Choice’s repeated efforts to acquire Wyndham, alleging that “Choice continues to ignore our major concerns around value, consideration mix and asymmetrical risk to our shareholders, given the uncertainty around regulatory timeline.”
Holmes also drew attention to Choice’s fluctuating stock value, pointing out that the company’s cash-and-stock offer now sits at $86 per share, a decrease from the $90-per-share proposition made one month prior.
Holmes’ memo came in response to a Nov. 14 letter from Choice CEO Patrick Pacious, in which Pacious outlined what he described as an “enhanced proposal,” comprising added protections like a 6% reverse termination fee that would be payable to Wyndham should the deal fail to go through.
Holmes, however, said that this fee “does not even begin to compensate for the damage to our business in the event the deal does not close after an extended regulatory review.”
Choice and Wyndham have been locked in a tense corporate standoff ever since Choice went public with a proposal to acquire Wyndham for roughly $8 billion in mid-October.
Were the two companies to merge, their collective presence in the economy and limited-service sectors would be sizable. Choice is parent to brands including Comfort, Radisson, Sleep Inn, Quality Inn, Clarion, Rodeway Inn and Econo Lodge. Wyndham’s portfolio includes flags like Days Inn, Super 8, Travelodge, Ramada, La Quinta, Wyndham and Wyndham Garden.
In late October, the Asian American Hotel Owners Association came out against Choice’s efforts to acquire Wyndham, warning that the combined company would “dominate the economy/limited service segment.”
Source: Read Full Article