Choice Hotels International issued a statement in response to the Wyndham Hotels & Resorts Board of Directors' recommendation that its shareholders reject Choice's most recent exchange offer.

Wyndham Has Sought to Threaten Shareholders' Ability to Realize Value: Wyndham shareholders should be concerned by the company's blatant mischaracterization of the lodging industry's competitive landscape. Wyndham's comments call into question their ability to properly support franchisees while also generating shareholder value through M&A. The U.S. Federal Trade Commission ("FTC") will come to its own independent assessment of the proposed transaction's competitive merits based on the specific facts, like it does on every M&A transaction. Attempting to use the FTC to prevent Wyndham shareholders from even accessing the option of a merger with Choice robs them of meaningful upside from the combination or, at a minimum, the substantial break-fee Choice has offered in the unlikely event the transaction were not to receive the requisite regulatory clearance.

Wyndham's Board Continues to Not Be Forthcoming: Following the launch of Choice's exchange offer to acquire all outstanding shares of Wyndham on December 12, 2023, representatives of Wyndham contacted representatives of Choice for the purported purpose of engaging in discussions regarding a potential transaction and regulatory protections. Choice and its representatives engaged in good faith discussions, but, consistent with past practices, Wyndham's representatives abruptly ended those discussions on December 17, 2023. Wyndham failed to disclose these discussions in the Schedule 14d-9 that it filed yesterday.

Shareholders Are Eager for Both Parties to Work Together to Reach an Expedient Resolution: Since launching the exchange offer, we have engaged with dozens of Wyndham's institutional shareholders representing over 40 percent of shares outstanding based on the most recently available filings. In our discussions, many shareholders have consistently expressed support for the industrial merits of a transaction as well as the desire for both parties to work together to reach an expedient resolution.

“We remain confident we can complete the transaction within a one-year customary timeframe and are committed to moving forward with this process. We have already started the regulatory clock, and look forward to continuing to work closely with the FTC to support a fact-based review process grounded in the reality of this industry's evolving competitive landscape.”

AAHOA chairman Bharat Patel, in turn, congratulated Wyndham’s Board on his LinkedIn page, calling the decision “forward-thinking” and arguing that by “not giving in to Choice, Wyndham is acting in the best interest of their stakeholders. They will be able to continue to focus on providing top-quality service to their customers while investing in their employees and franchise owners.

“This decision will undoubtedly have a ripple effect on the industry at large and pave the way for other companies to consider similar strategies. This strategic move will undoubtedly pay off in the long run for hoteliers across the nation.”

Moelis & Company, Goldman Sachs & Co. and Wells Fargo are serving as financial advisors to Choice and Willkie Farr & Gallagher and Axinn, Veltrop & Harkrider are serving as legal advisors.

Follow the Choice/Wyndham news here.