Choice hotels has unveiled a plan for a hostile takeover of Wyndham for $90 per share ($7.8 billion and $9.8 factoring in Wyndham’s debt) in a cash and stock deal ($49.50 in cash and 0.324 shares of Choice common stock).
According to Choice they made an offer of $80 per share (40% cash and 60% Choice stock), that proposal was then rejected and Choice increased the offer to $85 per share (55% cash and 45% Choice stock) before the best and final offer of $90 per share (55% cash and 45% Choice stock) was made and rejected.
Wyndham says the deal was rejected as: ‘Choice’s offer is “highly conditional, and subject to significant business, regulatory and execution risk. Choice has been unwilling or unable to address our concerns’.
This is very good news. Choice would have ruined Wyndham, which is honestly a solid points system.
I agree. And Choice could have also ruined Choice in the merger, because it’s unclear whether they would have adopted Wyndham’s points system or kept their own or come up with a totally new and awful points system.
How is Wyndham good? It’s 30K points for a $100 hotel usually
Wyndham is worthless besides Caesar’s partnership.
Meh. I’ve had some good success with VACASA even after the deval, and there’s some hidden gem Wyndham properties out there.
Not a huge fan of either chain but I think Wyndham has more middle of the road places with Chase having more extreems in both directions (Luxury and crumbling)
Is that why Wyndham nuked their points
It’s a takeover bid, not a hostile takeover. If it was a hostile takeover, they can’t decline the offer.
They rejected the takeover bid, from what I read Wyndham is planning a hostile to
I believe it’s spelled “hostel”
It’s hostile. Every takeover bid can be declined by somebody.
The label of hostile refers to whether the board of directors and/or management of the company being acquired agrees with the merger. Wyndham’s board has already said no.
Choice is now making their bid public to create pressure against the board from shareholders who might be angry about an offer being refused that would make their shares worth 23% more overnight (Wyndham is currently trading at $73 vs. $90 buyout offer). This could cause them to vote out the board members and elect new ones who are more merger-friendly.
Or, Choice might buy just enough shares (usually 51%) from the public to give them enough power to replace some of the board members themselves. Then they will ask the board that they created what they think of the buyout offer…
Anyway, this is hostile.
Interesting, I’ve always thought the hostile moniker only referred to the final case, where 51% of stock is bought so the acquiree can’t say now. I wasn’t aware it also referred to cases where the acquirer is applying pressure to try to convince the other board. Neat!
The hostile moniker applies to cases where the end goal is to end up with 51% of shares voting for merger when the current board is not aware or has declined. When the acquirer doesn’t end up with 51% of shares, as in this case, it is called a failed hostile takeover.
That’s what I was thinking, if somebody is being hostile, they’re not really giving you the option to turn down offers.
I feel like this is saying to buy Wyndham stock.. right? It’s currently trading at 73.50. Even if this deal doesn’t get done, that’s basically Wyndham saying that they think they can get higher without the merger? Feels like a win-win…?
But I don’t buy stocks, and I don’t see Wyndham getting gobbled up. Someone who understands this stuff- can you explain this to me?
Something like this happened with spirit and JetBlue. Be careful before you think something that seems like an obvious money maker is easy
The price if 73.50 is already pricing in the likelihood of this merger going through. So if it indeed falls apart because of rejection, non approval, or anything else, we would probably see the price drop lower than 73.50 immediately after that happens.
There is still some upside if you think the merger will happen, but there is always a gamble.
In hindsight, while you wouldn’t have lost money, you’d have been far better off in an index fund. Their stock made it up to about 80 and this announcement seems to have had minimal impact. Price didn’t jump to to 85 or 90 because there was always a decent chance it wouldn’t have gone through, plus even if it goes through only a portion would be received in cash so you’d end up with a bunch of Choice stock. Hardly an automatic 11.50 profit.
What would happen to the Barclay issued Wyndham cards if Choice were to buy Wyndham?
what would happen to wyndham diamond status through business card and caesar match if Choice does buys wyndham
Yeah let’s be honest that’s the only thing we care about here
Choice is quite the zombie. It ate Radisson and it’s still hungry…
With what it wants to eat next, it seems more like a black hole. 🙂
Succession has made me think these guys meet on some private island to trade insults in order to arrive at a number