Choice Hotels International (CHH) has decided to terminate its approximately $7.8 billion takeover bid for competitor Wyndham Hotels & Resorts (WH). The decision comes after what Choice Hotels described as Wyndham’s board’s “refusal to constructively and substantively engage on terms.”
The acquisition saga began nearly a year ago when Choice Hotels initially expressed interest in acquiring Wyndham. Over time, the proposal evolved into a full-fledged takeover attempt by December. However, Choice Hotels has now announced its intention to shift focus back to its own operations.
Choice Hotels further revealed that its board has authorized an increase in its stock buyback program by 5 million shares, amounting to approximately $632 million at the current market price. This move underscores the company’s commitment to delivering value to its shareholders amidst the failed acquisition.
Despite garnering some support among Wyndham’s shareholders, Choice Hotels stated that it sees no viable path towards completing the transaction at this time.
Read more: Choice Hotels Challenges Wyndham’s Antitrust Claims in Proposed Acquisition
In response to Choice Hotels’ decision, Wyndham Hotels & Resorts released a statement along with a letter addressed to shareholders, asserting that the company has a strategy in place to generate value for its shareholders that surpasses the “inadequate and uncertain offer” put forth by Choice Hotels.
Wyndham’s letter to shareholders highlighted several concerns raised by its board regarding Choice Hotels’ offer, including “insufficient valuation, unattractive consideration mix, and asymmetrical regulatory risk.” The letter accused Choice Hotels of being either unable or unwilling to address these issues despite repeated attempts by Wyndham’s board.
Both Choice Hotels International and Wyndham Hotels & Resorts are prominent players in the hospitality industry, operating a multitude of hotel chains across the United States. Brands under their umbrella include Days Inn and La Quinta (Wyndham), as well as Radisson and Comfort Inn (Choice Hotels). Had the acquisition been successful, the combined entity would have overseen a network of approximately 16,000 locations worldwide.
Source: Investopedia
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