Shares of
Wyndham Hotels & Resorts
were rising sharply in premarket trading Tuesday after
Choice Hotels International
announced a proposal to acquire the hotel chain for $90 a share in a cash-and-stock deal.
Under the proposal — which would combine two of the biggest names in the budget-hotel sector — the $90 a share would be comprised of $49.50 in cash and the rest in stock. The proposal implies a total equity value for Wyndham of about $7.8 billion on a fully diluted basis. With the assumption of the company’s net debt, the proposed transaction is valued at about $9.8 billion.
Wyndham (ticker: WH) stock was soaring 13%, while
Choice Hotels
(CHH) shares slid 6.4% in premarket trading.
Marriott International
pointed 0.3% lower ahead of the open, and
Hilton Worldwide Holdings
(HLT) was flat, while
Intercontinental Hotels Group
(IHG.U.K) rose 2.7% in London trading
The latest proposal arrives publicly after Wyndham’s “decision to disengage from further discussions” with Choice after almost six months of conversations, according to a press release.
“A few weeks ago, Choice and Wyndham were in a negotiable range on price and consideration, and both parties have a shared recognition of the value opportunity this potential transaction represents,” Choice President and CEO Patrick Pacious said in the release.
“We were therefore surprised and disappointed that Wyndham decided to disengage,” he continued. “While we would have preferred to continue discussions with Wyndham in private, following their unwillingness to proceed, we feel there is too much value for both companies’ franchisees, shareholders, associates, and guests to not continue pursuing this transaction.”
Write to Emily Dattilo at [email protected]
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