Things are getting messy with the attempted deal between Wyndham Hotels & Resorts and rival, smaller chain Choice Hotels.
After a negotiation that had spanned over six months, Wyndham officially rejected Choice’s bid to purchase the chain for roughly $7.8 million.
Early Tuesday morning, Choice went public with its proposal to purchase the outstanding shares of Wyndham for roughly $90 per stock, claiming that Wyndham had made the “decision to disengage from further discussion” on the acquisition after the two companies had been in talks regarding a deal for half a year.
“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,” said Patrick Pacious, president and CEO of Choice Hotels, in a company release. “Importantly, we remain convinced of both the many benefits of the combination and our ability to complete it.”
Choice’s offer would have allowed Wyndham shareholders to choose cash, stock, or a combination of the two and would have given Wyndham two seats on the new Board.
Just hours later, Wyndham publicly rejected the offer.
“Choice’s offer is underwhelming, highly conditional and subject to significant business, regulatory and execution risk,” Wyndham Chairman Stephen Holmes said Tuesday afternoon. “Choice has been unwilling or unable to address our concerns.”
According to Choice reps, the chain originally offered to purchase Wyndham at $80 per share but was rejected before bumping the offer to $85 per share in private conversations.
Wyndham oversees many popular hotel and motel chains such as Days Inn, Ramada, and Howard Johnson. Wyndham posted a $335 million profit in fiscal 2022, with revenue of $1.5 billion.
Wyndham was up a strong 8.76% Tuesday afternoon following the news of the merger rejection.