Wyndham Hotels & Resorts Inc. rejected a takeover offer from Choice Hotels International Inc., saying the proposal undervalues the company’s potential for growth and would be subject to a lengthy regulatory review.
Choice on Tuesday went public with its $90-a-share bid for Wyndham, a cash and stock deal that values the company at about $9.8 billion including debt. Wyndham broke off negotiations after the two parties had discussed a potential transaction for months, Choice said.
A deal also would face regulatory scrutiny given the US government’s antitrust stance, Wyndham said in a statement.
“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,” Wyndham Chairman Stephen Holmes said in the statement.
Combining the two companies would create a giant player in the world of budget hotels. Wyndham operates more than 9,000 properties across 24 brands, including Days Inn, Ramada and Super 8. Choice has about 7,500 hotels and 22 brands, including midscale, extended stay and economy offerings.
The most recent offer is sweetened from Choice’s initial proposal in April to acquire Wyndham for $80 a share. Choice eventually increased the price to $90 and bumped the cash component to 55%.
