Choice Hotels Takes Its Proposal Directly To Wyndham Shareholders - Can The Hostile Attempt Succeed?

Choice Hotels International Inc CHH has commenced an exchange offer to acquire Wyndham Hotels & Resorts, Inc WH to present its proposal directly to Wyndham shareholders. 

Choice currently holds approximately 1.5 million shares of Wyndham common stock, valued at more than $110 million.

The exchange offer maintains the previously proposed offer to Wyndham, of $49.50 in cash and 0.324 shares of choice common stock per Wyndham share.

Choice made a proposal privately to Wyndham on November 14, 2023. Instead of discussing the terms of such a proposal with Choice, Wyndham publicly rejected the proposed terms on November 21, 2023.

The exchange offer and withdrawal rights are scheduled to expire at 5:00 PM, New York City time on Friday, March 8, 2024, unless the offer is extended or terminated. 

Choice said it is also actively identifying, director candidates to nominate to Wyndham's board.

Choice said it is committed to completing the transaction within one year and is starting the clock on the regulatory approval process.

"While we would have preferred to come to a negotiated agreement, the Wyndham Board's refusal to explore a transaction has left us with no choice but to take our proposal directly to Wyndham's shareholders," said Choice President and CEO Patrick Pacious.

Wyndham's Response: Wyndham, which seeks to review the offer to determine the course of action, commented that the offer looks to be unchanged from Choice's previous highly conditional offer the Board reviewed and rejected, which failed to address the serious concerns.

Wyndham noted Choice's ownership of less than 1.7% of Wyndham common stock and are restricted from further purchases without antitrust approval.

Wyndham urged its shareholders not to take any action with respect to the offer and intends to advise shareholders of its recommendation within ten business days.

Price Action: CHH shares are trading lower by 1.83% at $111.73 and WH is up 0.03% at $79.24 on the last check Tuesday.

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