Choice Hotels Proposes $7.8 Billion Deal to Acquire Wyndham Hotels and Resorts
Choice Hotels aims to create a U.S. budget hotel giant by acquiring Wyndham Hotels and Resorts for approximately $7.8 billion in a cash and stock deal.
Choice Hotels has put forward a proposal to acquire Wyndham Hotels and Resorts for $7.8 billion, aiming to create a U.S. budget hotel giant. The demand for affordable hotels, such as Choice and Wyndham, is on the rise due to persistent high inflation and recession affecting consumer spending on travel.
Wyndham’s shares surged about 22% before the bell, indicating positive market response. The company is yet to respond to Reuters’ request for a comment.
The offer made by Choice includes $90.00 per share for Wyndham shareholders, comprising $49.50 in cash and 0.324 shares of Choice’s common stock for each Wyndham share owned. This offer represents a 30% premium to Wyndham’s last closing price and follows intermittent discussions between the two companies.
Choice Hotels had a market capitalization of $6.29 billion as of yesterday’s close, while Wyndham’s stood at $5.82 billion, indicating the potential scale of the combined entity.
Earlier in May, Reuters reported the possibility of a deal between Choice Hotels and Wyndham, based on information from a reliable source.
Positive Market Response and Potential Scale
Choice Hotels’ proposal to acquire Wyndham Hotels and Resorts for $7.8 billion has resulted in a significant surge in Wyndham’s shares, indicating a positive market response to the potential deal. By combining their resources and expertise, Choice and Wyndham aim to capitalize on the growing demand for affordable hotel options amid challenging economic conditions.
Choice Hotels’ Offer and Premium Value
Choice Hotels has extended a compelling offer to Wyndham shareholders, providing $90.00 per share, including a significant cash component and shares of Choice’s common stock. This offer represents a substantial premium of approximately 30% to Wyndham’s last closing price, showcasing Choice’s commitment to delivering value to the shareholders of both companies.
Creating a U.S. Budget Hotel Giant
The potential acquisition of Wyndham Hotels and Resorts by Choice Hotels would result in the creation of a U.S. budget hotel giant. The combined entity would leverage the strengths of both companies to meet the increasing demand for affordable accommodations. With their extensive network and expertise in the budget hotel segment, Choice and Wyndham are well-positioned to cater to the evolving needs of travelers.
As the discussions between Choice Hotels and Wyndham progress, industry experts eagerly await the outcome of this potential deal and its impact on the hospitality sector.
