Key Takeaways
- Choice Hotels on Monday ended its takeover bid for Wyndham Hotels, which had been valued at about $7.8 billion.
- Choice said it generated positive interest in the deal among Wyndham’s shareholders, but overall it felt there was no path to complete the acquisition.
- Wyndham called Choice’s offer “inadequate and uncertain” in its own statement and letter to shareholders.
- Choice’s stock was up more than 4% in late-morning trading Monday, while Wyndham shares were up about 0.9%.
- Choice said its board has authorized an additional 5 million shares in its stock buyback program as the chain refocuses on its own operations.
Choice Hotels International (CHH) has ended its roughly $7.8 billion takeover bid for competitor Wyndham Hotels & Resorts (WH), as it accused Wyndham’s board of a “refusal to constructively and substantively engage on terms.”
The acquisition attempt began nearly a year ago, and Choice’s attempts to buy Wyndham transformed over time from an acquisition offer to a takeover attempt in December. For now, Choice said it will refocus on its own operations, and also announced that its board has authorized an increase in its stock buyback program by 5 million shares, which would be worth about $632 million at Choice’s current price.
Choice said it generated some support among Wyndham’s shareholders, but has determined that there is no “path towards a transaction” available at this time.
Wyndham also released a statement and sent a letter to shareholders Monday morning, which said the company has a path to deliver value to its shareholders that is “substantially in excess of Choice’s inadequate and uncertain offer.”
The letter Wyndham sent to shareholders said Choice Hotels’ offer had a number of issues the Wyndham board raised multiple times, including “insufficient valuation, unattractive consideration mix and asymmetrical regulatory risk.” Wyndham also accused Choice of being “unable, or simply unwilling,” to alter the offer to address those concerns.
Both brands operate a number of hotel chains across the U.S., including Days Inn and La Quinta, owned by Wyndham, and Radisson and Comfort Inn from Choice. Had the acquisition been completed, the brands would have operated a combined 16,000 locations around the globe.
Choice Hotels shares were up 4.3% at $126.42 around 11:30 a.m. ET, while Wyndham shares were up 0.9% to $76.82.