PARSIPPANY, New Jersey—Wyndham Hotels & Resorts announced that its Board of Directors, following a review with its outside financial and legal advisors, has unanimously determined the exchange offer from Choice Hotels International, Inc. to acquire all outstanding shares of Wyndham is not in the best interests of Wyndham and its shareholders. The Wyndham Board of Directors recommends that shareholders not tender any of their shares into the offer.
“Choice has, once again, failed to address the major value gap and risks of their offer—which remains virtually unchanged from the terms outlined in their previous unsolicited proposal,” said Stephen P. Holmes, chairman of the Board. “The core issues we have articulated remain the same: A likely prolonged regulatory review period of up to 24 months with an uncertain outcome; the pure inadequacy of the offer from a valuation standpoint, including the significant equity component of Choice stock; and the lack of consideration for Wyndham’s superior, standalone growth prospects.”
Holmes continued, “Our Board has made itself consistently clear on these risks, but Choice continues to ignore what is in the best interests of Wyndham shareholders by repeatedly proposing illusory and unrealistic offers while making inconsistent and misleading public statements. We are confident Wyndham can deliver long-term shareholder value well in excess of the $85 per share offered by Choice by continuing to execute on our existing business plan. The Board is steadfast in our recommendation that shareholders not tender their shares into this offer, and we remain fully committed to acting in the best interests of all Wyndham shareholders.”
The Company showed a presentation detailing the antitrust risks this offer presents.
Wyndham’s Board of Directors conducted a comprehensive review of the Offer and recommends shareholders reject the Offer for the following reasons:
- The offer involves an uncertain regulatory timeline and outcome and does not provide sufficient protections and compensation for the asymmetrical risks Wyndham shareholders would face.
- The offer undervalues Wyndham’s standalone growth prospects.
- Choice’s offer mischaracterizes Wyndham’s growth potential.
- Choice’s stock is at risk for further price degradation with a slower-growing business. Post-transaction, Choice’s leverage level would surpass all other lodging peers’ average leverage ratios—affecting not only the value of the equity consideration in the offer but also limiting Choice’s ability to invest in future growth.
- The offer is subject to a litany of conditions, which make the consummation of the offer uncertain.
