Wyndham Shares Soar as Choice Hotels Proposes $7.8 Billion Acquisition Deal


Key Takeaways

  • Choice Hotels has offered to acquire the Wyndham hotel chain for $90 per share in a stock-and-cash deal valued at about $7.8 billion.
  • Choice Hotels’ offer is at a 26% premium to Wyndham’s 30-day volume-weighted average closing price as of Monday
  • Wyndham shares soared 8% Tuesday but Choice stock fell 5.6%.
  • As inflation pressure has eroded travelers’ buying power, the demand for affordable hotels and motels has increased.

The stock of Wyndham Hotels & Resorts Inc. (WH) rose more than 8% in trading Tuesday after Choice Hotels International Inc. (CHH) proposed to acquire the company with a $90-a-share stock-and-cash deal valued at approximately $7.8 billion. Choice shares fell 5.6% after the news.

Shareholders will receive $49.50 in cash and 0.324 share of Choice common stock for each Wyndham share they own. The latest offer in the months-long discussions stands at a 26% premium to Wyndham’s 30-day volume-weighted average closing price Monday. Wyndham was reported as rejecting the offer by The Wall Street Journal Tuesday.

Wyndham shareholders will have the option to choose cash, stock, or a combination of the two, based on their preferences.

Inflation and recessionary pressures may have left consumers to opt for more affordable travel, increasing demand for affordable chains such as Choice and Wyndham. Wyndham operates more than lodging brands, including Days Inn and Travelodge. It also manages and licenses a diverse collection of hotels that are mostly located in smaller U.S. cities.

Econo Lodge, Quality Inn, and Clarion are operated by Choice Hotels, which franchises about 7,400 hotels, catering to a range of customers from midrange to upscale budgets.

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