Skip to content

Search

Latest Stories

Choice continues to pursue Wyndham buyout, Wyndham still refuses

Wyndham says the newest offer is ‘a step backwards’ and not in stockholders’ best interest

Choice continues to pursue Wyndham buyout, Wyndham still refuses

CHOICE HOTELS INTERNATIONAL is continuing its bid to acquire Wyndham Hotels & Resorts while the latter’s board of directors continues to refuse those advances. Earlier this month, Choice sent a letter to Wyndham’s board that Wyndham calls “a step backwards.”

In its original proposal, made public in October, Choice said it sought to acquire all the outstanding shares of Wyndham at a price of $90 per share and shareholders would have received $49.50 in cash and 0.324 shares of Choice common stock for each Wyndham share they own. Choice claimed that is a 26 percent premium to Wyndham’s 30-day volume-weighted average closing price ending on Oct. 16, an 11 percent premium to Wyndham’s 52-week high, and a 30 percent premium to Wyndham’s latest closing price.


Wyndham’s board unanimously rejected Choice’s proposal, calling it unsolicited, “highly conditional” and not in the best interest of shareholders. On Nov. 14, however, Choice sent a letter to the Wyndham board with an “enhanced proposal” intended to address Wyndham’s concerns about clearing federal regulations.

Among the changes proposed are:

  • Reverse termination fee of $435 million, or approximately 6 percent of the total equity purchase price.
  • A regulatory ticking fee of 0.5 percent of the total equity purchase price per month, accruing daily after the one-year anniversary of the signing of definitive agreements.
  • Choice agrees to take any actions required by antitrust regulators to close so long as such actions would not have a material adverse effect on the combined company, subject only to agreeing to an outside date 12 months post-signing of a definitive agreement, with two 6-month extensions exercisable by either party, if regulatory approvals have not been obtained by such date.

“The industrial logic of the transaction is irrefutable, and as already discussed amongst principals and legal advisors over the past few months, this transaction is pro-competitive and the required regulatory approvals are obtainable,” Choice said in its letter. “In addition, our franchisees, many of whom own both Wyndham and Choice brands, have instantly grasped the benefits of this combination, particularly in light of rising operational costs. This combination will drive more direct bookings, lower hotel operating costs, and create a stronger rewards program. As such, we believe now is the right time to reengage in a direct and private dialogue in order to negotiate a transaction that is in the best interest of all our respective stakeholders.”

Still not enough

The proposed changes are not enough to change Wyndham’s mind about the transaction, that company said in its response to the most recent letter. For example, Choice’s offer now stands at $86 per share, below the previous $90 per share. The offered 2-year period for seeking approval of the deal with its 6 percent termination fee would actually “create a prolonged period of limbo and expose Wyndham and its shareholders to significant asymmetrical risk.”

"Choice continues to ignore our major concerns around value, consideration mix, and asymmetrical risk to our shareholders given the uncertainty around regulatory timeline and outcome,” said Stephen Holmes, Chairman of the Wyndham board. “Given they now explicitly acknowledge the legitimate issues around the regulatory timeline, they are essentially asking our shareholders to take on serious risk and accept as compensation for a failed deal a low reverse termination fee that doesn't even begin to compensate for the potential lost earnings and long- term impairment to value that could occur during an uncertain two-year regulatory review. In line with our fiduciary duties, we will of course always evaluate any serious proposal, but Choice continues to fail to adequately address any of the three core issues we have repeatedly raised. They have instead chosen to prolong this for months with a proposal that remains unfeasible, damaging to our business, and unnecessarily distracting to our management team.”

Wyndham’s letter also claimed Choice’s offer undervalues its growth prospects and the value of its shares relative to those prospects. Wyndham’s franchisees remain “unenthusiastic” about Choice’s offer, the company said.

In a previous statement, AAHOA also opposed the deal, saying that a merged Choice/Wyndham would have 16,500 hotels with 46 brands and dominate the economy/limited service segment.

“As the owners of more than two-thirds of both Choice Hotels and Wyndham-branded hotels, AAHOA members have much at stake with Choice’s potential purchase of Wyndham,” said AAHOA Chairman Bharat Patel. “To have one franchisor Choice Hotels control so many economy and limited service hotels will give our members little opportunity to have a say in whether the franchise mandates and requirements are fair, and significantly limit their options to find a different brand under which they could successfully operate their hotels.”

More for you

Trump reviewing 55 million us visas
Getty Images

Trump reviewing 55 million visas

Summary:

  • The Trump administration says it is reviewing more than 55 million visa holders.
  • Reviews cover a wide range of visas for law enforcement and overstay violations.
  • The administration also suspended worker visas for foreign commercial truck drivers.

THE TRUMP ADMINISTRATION is reviewing more than 55 million people who hold valid U.S. visas for potential violations. It is expanding a policy of “continuous vetting” that could result in revocation and deportation.

Keep ReadingShow less
Peachtree Funds Rio Las Vegas Renovations | $176M CPACE Loan
Photo credit: Hyatt Hotels Corp.

Peachtree originates retroactive CPACE loan for Rio Vegas

Summary:

  • Peachtree Group originated a $176.5 million retroactive CPACE loan for a Las Vegas property.
  • The deal closed in under 60 days and ranks among the largest CPACE financings in the U.S.
  • The company promotes retroactive CPACE funding for commercial real estate development.

PEACHTREE GROUP ORIGINATED a $176.5 million retroactive Commercial Property Assessed Clean Energy loan for Dreamscape Cos.’s Rio Hotel & Casino in Las Vegas. The deal, completed in under 60 days, is its largest credit transaction and one of the largest CPACE financings in the U.S.

Keep ReadingShow less
Spark Acquires Home2 Suites Wayne, New Jersey
Photo Credit: Hunter Hotels

Spark acquires Wayne, N.J., Home2 Suites

Summary:

  • Spark acquired the 120-key Home2 Suites by Hilton Wayne in Wayne, New Jersey.
  • Hunter Hotel Advisors facilitated the transaction with DC Hospitality Group affiliates.
  • The 2020-built hotel is near William Paterson University and less than 20 miles from Manhattan.

SPARK GHC RECENTLY acquired the 120-key Home2 Suites by Hilton Wayne in Wayne, New Jersey, from affiliates of DC Hospitality Group. Hunter Hotel Advisors facilitated the deal for an undisclosed amount.

Keep ReadingShow less
Global hotel construction pipeline reaches record 15,871 projects in Q2 2025, with U.S. and Dallas leading growth
Photo Credit: iStock

Report: Global pipeline hits 15,871 projects

Summary:

  • Global pipeline hit a record 15,871 projects with 2.4 million rooms in Q2.
  • The U.S. leads with 6,280 projects; Dallas tops cities with 199.
  • Nearly 2,900 hotels are expected to open worldwide by the end of 2025.

THE GLOBAL HOTEL pipeline reached 15,871 projects, up 3 percent year-over-year, and 2,436,225 rooms, up 2 percent, according to Lodging Econometrics. Most were upper midscale and upscale, LE reported.

Keep ReadingShow less
HAMA Launches 20th Student Case Competition in USA
Photo Credit: iStock

HAMA launches 20th student case competition

Summary:

  • HAMA is accepting submissions for its 20th annual student case competition.
  • The cases reflect a scenario HAMA members faced as owner representatives.
  • Teams must submit a financial analysis, solution and executive summary.

THE HOSPITALITY ASSET Managers Association is accepting submissions for the 20th Annual HAMA Student Case Competition, in which more than 60 students analyze a management company change scenario and provide recommendations. HAMA, HotStats and Lodging Analytics Research & Consulting are providing the case, based on a scenario HAMA members faced as owner representatives.

Keep ReadingShow less