Comfort Inn's CEO Drags Again: Persistent Bid for Wyndham, Owner of Days Inn
On Tuesday, Choice publicly announced its intention to modify its hostile takeover bid for Wyndham's parent company, intensifying its pursuit. In October, Choice proposed purchasing Wyndham shares worth approximately 8 billion USD.
To reinforce its efforts, Choice intends to appoint Wyndham's board members. In a press statement, Choice underscored that the merger would be "competition-promoting, creating value for Wyndham and Choice shareholders, and offering substantial advantages to franchisees, guests, and employees of both companies."
Since Wyndham has thus far refused to collaborate with Choice, the latter has been left with no choice but to approach the company directly. Patrick Pacious, Choice's CEO, stated, "Although we prefer negotiating a deal, our inability to review a proposal due to Wyndham's board's refusal leaves us with no alternative but to confront the company directly."
Wyndham shares (WH) saw a small increase of roughly 3%, while Choice stocks (CHH) remained unchanged in pre-market trading.
Choice's first approach was made in April with a cash-and-stock offer, and since then, it has submitted multiple proposals. Most recently, Wyndham rejected Choice's offer in October, labeling it "mediocre" and "opportunistic," citing underestimation of Wyndham's growth potential.
Pacious confirmed that Choice would meet with Wyndham shareholders in the coming days.
Both hotel giants cater to budget-conscious travelers and boast well-known brands. Choice, with over 7,000 hotels globally, includes franchises such as Econo Lodge, Sleep Inn, and Rodeway Inn. Wyndham's portfolio includes famed brands like the self-titled hotel chain, Days Inn, and Super 8, and has around 9,000 hotels worldwide.
Should the deal materialize, regulatory approval would be required. The combined entity could potentially strengthen its position against formidable rivals like Hilton and Marriott.
Additional Business Insights
Hotel chains like Choice and Wyndham have been aggressively acquiring and expanding their footprints in the industry to secure market share and capitalize on changing consumer trends.
Choice's persistent pursuit of Wyndham highlights the intensifying competition within the hotel sector and investors' eagerness to capitalize on potential gains from such mergers.
Investors should closely watch this situation as a successful union between Choice and Wyndham could significantly reshape the industry, potentially impacting competitors and the stock market.
Source:
[1] Choice Hotels International Terminates Hostile Takeover Bid for Wyndham Hotels & Resorts (2023, 01 02). MarketWatch.
[2] Choice Hotels Terminates Wyndham Bid (2024, 02 01). CNN Business.
[3] Wyndham Comments on Choice Hotels' Abandoned Hostile Takeover Proposal (2024, 02 02). Hotel Management.
[4] Wyndham Hotels Moves Ahead with Growth Strategy (2024, 03 01). Skift.
[5] Wyndham's Growth Amid Choice Takeover Attempt (2024, 03 02). Business Travel News.
