Choice Hotels International has launched a nearly $8 billion hostile takeover bid for rival Wyndham Hotels and Resorts. The two hotel giants had been trying to negotiate for six months. Together, the two companies have nearly 17,000 hotels under their brands.
Choice Hotels smaller than Wyndham
Choice operates approximately 7,500 hotels in 46 countries. While Wyndham operates nearly 9,300 hotels under various brands such as Days Inn, Howard Johnson, La Quinta, Ramada, Super 8 and Travelodge, the company is trying to take on a much larger chain.
For the president of Choice Hotels, this is an opportunity for significant growth
Patrick Pacious, President and CEO of Choice Hotels, said: “We have long valued Wyndham’s businesses and believe this combination would significantly enhance Choice and Wyndham’s long-term organic growth strategies.
For franchisees, the transaction would bring Choice’s proven franchise system to a wider range of owners and allow them to benefit from Choice’s best-in-class reservation platform and proprietary technology to achieve cost savings and returns on investment increased.
Wyndham board disagrees
Its statement called the offer opportunistic and said it undervalued Wyndham’s future growth potential. Stephen Holmes said the proposed transaction would likely take more than a year to determine whether it could face antitrust review. Stephen Holmes continued: “We are disappointed that Choice’s description misleadingly suggests that we agreed on fundamental terms and fails to describe the real reasons why we have consistently questioned the merits of this merger.
In fact, it’s all about the price to pay!