Choice Hotels International has given up its hostile $7 billion bid to acquire Wyndham Hotels & Resorts, the company announced Monday.
Choice also withdrew the eight nominees it had put forward as candidates for Wyndham’s board of directors.
Choice last week had called upon Wyndham shareholders to agree by March 8 to tender their shares to Choice’s exchange offer to “send a clear message to Wyndham’s board of directors” in support of Choice’s hostile bid before a deadline this morning to extend that exchange offer. Instead, Choice in a Monday statement said the level of support was “not sufficient” to continue with the bid.
“While the support from Wyndham stockholders tendering into the exchange offer was significant considering the number of investors structurally prevented from participating at this stage, it was not sufficient for Choice to conclude—particularly when taking into account the Wyndham board’s obvious continuing disinterest in a combination—that a path towards a transaction is available at this time.”
After failing to reach a deal earlier in 2023, Choice in December launched a hostile bid for the company, offering Wyndham shareholders $49.50 in cash and 0.324 shares of Choice per share.
Wyndham’s board and management have opposed the deal since it was announced, calling it inadequate and too reliant on Choice stock, with an uncertain path to federal regulatory approval. Choice in January named eight nominees to Wyndham’s board of directors who would stand for election at Wyndham’s 2024 annual meeting of shareholders. Choice last week said, “Wyndham’s recent quarterly results give Choice limited confidence in further enhancing its proposal without proper due diligence.”
Choice on Monday even as it announced the deal’s end defended its merits, noting, “The progress made on the regulatory front confirmed Choice’s belief that the combination is pro-competitive, and approval would have been achievable in a customary timeframe.”
Wyndham president and CEO Geoff Ballotti in a Monday statement said: “Wyndham is focused on moving ahead with the execution of our strategic plan, building on our success and generating meaningful value. We look forward to doing so without the unnecessary distraction of this situation and disruption to our business.”
