Skip to content

Search

Latest Stories

Choice seeks to acquire Wyndham despite rejection

Wyndham’s board calls the proposal ‘unsolicited’ and ‘underwhelming’

Choice seeks to acquire Wyndham despite rejection

MONTHS OF RUMOR were confirmed true when Choice Hotels International on Wednesday announced it has proposed to acquire Wyndham Hotels & Resorts in an approximately $9.8 billion transaction. The proposal to Wyndham stockholders came after months of negotiations broke down and Wyndham’s board of directors voted to decline Choice’s offer, calling it “underwhelming” and risky.

AAHOA also issued a statement saying it has “high concern” that a Choice/Wyndham merger would give one franchiser too much dominance over the economy/limited service hotel segment.


The proposal

In its announcement of the proposal, Choice said it sought to acquire all the outstanding shares of Wyndham at a price of $90 per share, payable in a mix of cash and stock. Shareholders would receive $49.50 in cash and 0.324 shares of Choice common stock for each Wyndham share they own. Choice claims 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 shareholders would be able to choose either cash, stock, or a combination of cash and stock consideration, subject to a customary proration mechanism. The proposal implies a total equity value for Wyndham of approximately $7.8 billion on a fully diluted basis.

"We have long respected Wyndham's business and are confident that this combination would significantly accelerate both Choice's and Wyndham's long-term organic growth strategy for the benefit of all stakeholders,” said Patrick Pacious, Choice’s president and CEO. “For franchisees, the transaction would bring Choice's proven franchisee success system to a broader set of owners, enabling them to benefit from Choice's world-class reservation platform and proprietary technology to drive cost savings and greater investment returns. Additionally, the value-driven leisure and business traveler would benefit from the combined company's rewards program, which would be on par with the top two global hotel rewards programs, enabling them to receive greater value and access to a broader selection of options across stay occasions and price points."

Choice’s efforts to acquire Wyndham has been rumored about since June, at which time both companies denied it. Geoff Ballotti, Wyndham's president and CEO, continued to deny the reports as late as September during the company’s 2023 Global Conference in Anaheim, California.

“We never will comment on rumors,” Ballotti said at the time. “I hear a rumor just about every hour on the hour about something going on.”

Choice said negotiations on the deal have been ongoing for six months.

"A few weeks ago, Choice and Wyndham were in a negotiable range on price and consideration, and both parties have a shared recognition of the value opportunity this potential transaction represents. We were therefore surprised and disappointed that Wyndham decided to disengage,” Pacious said. “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. Importantly, we remain convinced of both the many benefits of the combination and our ability to complete it."

Choice made its proposal public as a direct appeal to Wyndham’s shareholders. It also created a website, CreateValueWithChoice.com, to promote the merger.

In its response, Wyndham outlined its specific reasons for declining Choice’s offer.

The response

Wyndham’s board unanimously rejected Choice’s proposal, calling it unsolicited, “highly conditional” and not in the best interest of shareholders. They identified several issues with the proposal, including:

  • The proposed transaction involves significant business and execution risks, including an extended regulatory timeline and uncertainty of outcome, potential franchisee churn, and excessive leverage levels at the pro forma combined company.
  • The consideration mix includes a significant component of Choice stock, which the board believes is fully valued relative to Choice's growth prospects, especially when compared to Wyndham.
  • The offer is opportunistic and undervalues Wyndham's future growth potential.

"Choice's offer is underwhelming, highly conditional, and subject to significant business, regulatory and execution risk.  Choice has been unwilling or unable to address our concerns," said Stephen Holmes, chairman of the Wyndham board.  "While our board would support a value-maximizing transaction, given the substantial, unmitigated embedded risks and value destruction potential presented by the proposed transaction, our board determined it is not in the best interests of Wyndham shareholders.  We have engaged with Choice and its advisors on multiple occasions to explore these risks.  However, it became clear the proposed transaction likely would take more than a year to even determine if, and on what terms, it could clear antitrust review, and Choice was unable to address these long-term risks to Wyndham's business and shareholders. We are disappointed that Choice's description of our engagement disingenuously suggests that we were in alignment on core terms and omits to describe the true reasons we have consistently questioned the merits of this combination – Choice's inability and unwillingness to address our significant concerns about regulatory and execution risk and our deep concerns about the value of their stock."

AAHOA gave similar reasons for opposing the merger.

Concerned about ‘sector dominance’

In its statement, AAHOA pointed out 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.”

In February, Choice withdrew its support for AAHOA over the association’s support for franchising reform, including a proposed bill in New Jersey’s Assembly Bill 1958, which would make changes to the New Jersey Franchise Practices Act that could benefit hotel owners.

“This news of a potential merger has sent a shock wave of high concern and even fear through our AAHOA membership,” said Laura Lee Blake, AAHOA president and CEO. “We have seen in the past the major impact that mergers and acquisitions by the big hotel franchisor corporations can have on our members as the hotelier franchisees. Indeed, our AAHOA members fear a significant further dilution of the brands and fighting over the guest reservations on one reservation system. The changes can be highly disruptive to their business practices, and even cause a significant decrease in revenues overall.”

Blake said AAHOA is calling on the Federal Trade Commission to investigate the proposed merger.

More for you

Hilton

Hilton posts unit growth as Q2 RevPAR slips

Summary:

  • Hilton reported 7.5 percent net unit growth in the second quarter while systemwide RevPAR declined 0.5 percent year-over-year.
  • Net income and adjusted EBITDA for the first half of 2025 were $742 million and $1.8 billion, up from $690 million and $1.67 billion YoY.
  • For the third quarter of 2025, Hilton expects systemwide RevPAR to be flat to slightly down.

HILTON WORDLWIDE HOLDINGS reported 7.5 percent net unit growth in the second quarter of 2025, however systemwide RevPAR declined 0.5 percent year-over-year. The company said economic fluctuations are being felt but not hindering performance.

Keep ReadingShow less
Peachtree Group loan
Photo credit: Peachtree Group

Peachtree backs $42M loan for AFC deal

Summary:

  • Peachtree provided a $42 million floating-rate loan to Banyan Street Capital for the acquisition and repositioning of Atlanta Financial Center in Buckhead.
  • The deal delivers capital at a reset basis, with comps pricing 98 percent higher, reflecting strong collateral and execution.
  • It recently launched a $250 million fund to invest in hotel and commercial assets mispriced from market illiquidity.

PEACHTREE GROUP PROVIDED its first mortgage loan to Banyan Street Capital for the acquisition and repositioning of the 914,774-square-foot Atlanta Financial Center in Buckhead, Georgia. Peachtree said the office sector is at an inflection point, similar to the retail segment previously.

Keep ReadingShow less
Trump’s Proposed Visa Fee Threatens Seasonal Hospitality Workforce

Report: Trump visa fee sparks summer staffing fears

Summary:

  • Trump’s proposed $250 Visa Integrity Fee faces pushback from groups relying on seasonal J-1 workers from Latin America and Asia.
  • J-1 visa holders often work as housekeepers, amusement park staff, and lifeguards from pre-season through Labor Day; more than 300,000 use the visa annually.
  • DHS and the State Department have not clarified how the fee will be implemented or who qualifies for a refund.

A $250 VISA Integrity Fee in President Donald Trump’s Big Beautiful Bill is drawing criticism from groups that rely on seasonal workers from Latin America and Asia on J-1 and other visas, Newsweek reported. The organizations warn the cost, though sometimes refundable, could reduce the summer workforce that supports U.S. beach towns and resorts.

Keep ReadingShow less
Wyndham & Grubhub Offer Free Delivery to Guests & Staff

Wyndham, Grubhub offer free delivery to guests, staff

Summary:

  • Wyndham Hotels & Resorts is partnering with Grubhub to offer free product delivery to guests and staff at nearly 6,000 U.S. hotels across 20 brands.
  • A Grubhub account is required to activate the complimentary Grubhub+ membership; no credit card is needed and the membership does not auto-renew.
  • Wyndham recently deployed Elavon’s cloud payments interface to more than 6,000 U.S. and Canadian franchisees.

WYNDHAM HOTELS & RESORTS and Grubhub, an online ordering and delivery platform, will offer item delivery to guests and staff with no delivery fees and other benefits. The service is available at nearly 6,000 U.S. hotels across 20 brands, with orders placed through the Grubhub app on-site or by scanning a hotel QR code.

Keep ReadingShow less
U.S. Hotel Construction Hits 20-Quarter Low in June

CoStar: Hotel construction drops in June

Summary:

  • U.S. hotel rooms under construction fell year over year for the sixth straight month in June, hitting a 20-quarter low, CoStar reported.
  • About 138,922 rooms were under construction, down 11.9 percent from June 2024; the luxury segment had 6,443 rooms, up 4.1 percent year over year.
  • Lodging Econometrics recently said Dallas led all U.S. markets in hotel construction pipelines at the end of the first quarter, with 203 projects and 24,496 rooms.

THE NUMBER OF U.S. hotel rooms under construction declined year over year for the sixth straight month in June, reaching a 20-quarter low, according to CoStar. Additionally, more than half of all rooms under development are in the South, mostly outside the top 25 markets.

Keep ReadingShow less