Choice Hotels Proposes to Acquire Wyndham Hotels & Resorts for $90.00 per Share in Cash-and-Stock Transaction

Kayra Reven

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Shares of hotel franchise operator Wyndham Hotels & Resorts, Inc. (NYSE: WH) were briefly halted on Tuesday after experiencing a notable surge in their value. This surge was prompted by a report published by the Wall Street Journal, indicating that Choice Hotels International, Inc. (NYSE: CHH) is actively pursuing an acquisition of Wyndham. Such a merger has the potential to create one of the largest budget hotel ownership entities in the United States.

However, it’s important to note that at the present time, the two companies are not deeply engaged in negotiations, and it remains uncertain whether Wyndham is inclined to proceed with the proposed deal. If Wyndham chooses not to engage in further discussions, Choice Hotels might decide to take its case directly to Wyndham shareholders.

Wyndham is renowned for operating a range of popular hotel brands, including Super 8, Days Inn, Travelodge, Microtel, Howard Johnson, La Quinta, Ramada, and a collection of other hotels, with a primary focus on the economy and midscale market segments.

On the other hand, Choice Hotels boasts a portfolio that includes well-known brands such as Comfort Inn, Comfort Suites, Quality, and Clarion, among others. Notably, both of these hotel operators have market capitalizations that are each nearly $6 billion, and they operate using franchising models as part of their business strategies.

Represents 26% Premium to 30-Day VWAP ending on October 16, 2023, 11% Premium to 52-Week High, and 30% Premium to Latest Closing Price

Significantly Enhances the Return on Investment for Choice and Wyndham Franchisees

Provides a Compelling Range of Lodging Options and Price Points Well-Positioned to Serve Evolving Needs of the Value-Driven Traveler

Annual Run-Rate Synergies of Approximately $150 Million Anticipated While Accelerating Opportunities for Sustained Long-Term Growth

ROCKVILLE, Md., Oct. 17, 2023 /PRNewswire/ – Choice Hotels International, Inc. (NYSE: CHH) (“Choice”) has made a public proposal to acquire all outstanding shares of Wyndham Hotels & Resorts, Inc. (NYSE: WH) (“Wyndham”) for $90.00 per share, payable in a combination of cash and stock.

Choice’s offer represents an enticing 26% premium to Wyndham’s 30-day volume-weighted average closing price, ending on October 16, 2023. Furthermore, it offers an 11% premium to Wyndham’s 52-week high and a substantial 30% premium to Wyndham’s latest closing price. The proposal includes a cash or stock election mechanism, giving Wyndham shareholders the flexibility to choose their preferred form of consideration.

Stakeholder Benefits

Choice Hotels’ proposal aims to provide significant advantages for franchisees, shareholders, associates, and guests, particularly during the current uncertain economic climate.

For Franchisees:

  • Lower Total Cost of Ownership and Increased Hotel Profitability: The proposal capitalizes on Choice’s successful franchisee success system, driving topline reservation delivery to hotel owners’ properties while lowering operational costs.
  • Marketing Resources: It nearly doubles the resources available for marketing and direct bookings, reducing the cost of customer acquisition.
  • Enhanced Rewards Program: A larger rewards member base, on par with the top two global programs in hospitality.
  • Lower Booking Costs: More business directed to franchisees through lower-cost direct booking channels, reduced customer acquisition fees, and lower operating costs.
  • Increased Real Estate Asset Value: Improved cap rates and cash flows for franchisees.
  • Reduced Friction: A broad portfolio of brands for guests across segments, creating a seamless experience.
  • Technology and Innovation: Increased investment in technology, processes, and training.

For Shareholders:

  • Superior Value Creation: The offer represents substantial premiums to Wyndham’s stock price, with potential annual synergies of approximately $150 million.
  • EBITDA Multiple: Wyndham shareholders to benefit from Choice’s historically higher EBITDA multiple.
  • Free Cash Flow: Predictable high free cash flow through an asset-light, fee-for-service model.
  • Board Participation: Wyndham shareholders offered two seats on the combined company’s board.
  • Consideration Flexibility: Cash/stock consideration mechanism for shareholders.

For Guests:

  • More Lodging Options: A combined rewards program on par with the top two global programs in hospitality, offering the best-in-class program benefits and hotel redemption options.
  • Global Network: A global network of brands and hotels catering to value-driven travelers across various geographies and price points.
  • Efficient Booking: Improved data analytics for personalized communications and recommendations for up to 160 million combined rewards program members.

For Associates:

  • Employee Well-being: The ability to attract and retain top talent in the industry, with more opportunities for advancement and growth.

Recent Engagement with Wyndham

Choice has been in discussions with Wyndham for nearly six months, beginning with an initial proposal in April 2023. Despite the long engagement period, Wyndham decided to discontinue discussions with Choice, leading to the public proposal.

Patrick Pacious, President and Chief Executive Officer of Choice Hotels, expressed the belief that this merger would accelerate long-term organic growth for both Choice and Wyndham. He highlighted the benefits for franchisees, shareholders, associates, and guests, citing the substantial value opportunity that this potential transaction represents.

Choice intends to pursue this transaction due to the significant value it believes it can create for all stakeholders involved.

Financing, Conditions, and Approvals

The proposed transaction is subject to customary closing conditions, including regulatory and shareholder approvals. Choice is confident in its ability to obtain fully committed financing.

This offer is not an offer to buy or solicitation of an offer to sell any securities. Any potential transaction is subject to future developments and regulatory approvals.

Choice is prepared to move forward with due diligence and execution within 20 days of Wyndham’s agreement to engage.


Moelis & Company LLC and Wells Fargo are serving as financial advisors to Choice, and Willkie Farr & Gallagher LLP is serving as the legal advisor.

About Choice Hotels

Choice Hotels International, Inc. is one of the world’s leading lodging franchisors, with nearly 7,500 hotels in 46 countries and territories, offering a diverse portfolio of 22 brands.

Forward-looking Statements

This communication contains forward-looking statements. It does not guarantee future performance and involves known and unknown risks, uncertainties, and other factors.

Choice Hotels International, Inc.

Forward-looking Statements

This communication contains forward-looking statements. It does not guarantee future performance and involves known and unknown risks, uncertainties, and other factors.

Non-GAAP Financial Measurements and Other Definitions

The company evaluates its operations utilizing, among others, the performance metric adjusted EBITDA, which is a non-GAAP financial measurement. This measure should not be considered as an alternative to any measure of performance or liquidity as promulgated under or authorized by GAAP, such as net income.

Pipeline: Pipeline is defined as hotels awaiting conversion, under construction or approved for development, and master development agreements committing owners to future franchise development.

Additional Information

This communication does not constitute an offer to buy or solicitation of an offer to sell any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

Note: This article is for informational purposes only and should not be considered financial advice. Readers should conduct their own research and consult with financial professionals before making investment decisions.

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