During the company’s Q3 earnings call on Thursday, Wyndham Hotels & Resorts executives slammed Choice Hotels International’s unsolicited bid to buy out Wyndham for $8 billion, calling Choice’s proposition “desperate.”
Choice went public with its offer earlier this month to coerce Wyndham back to the negotiating table. Choice CEO Patrick Pacious said there is “too much value for both companies’ franchisees, shareholders, associates and guests to not continue pursuing this transaction.”
Wyndham vehemently disagrees. Company chairman Stephen Holmes said Choice is “not growing and has some serious issues within their organization. They’re trying to address that by making us the elixir to their problems.”
He added that Choice’s “plan seems to be to put out repetitive press releases and churn the water enough to make it interesting for us. That’s a bit of a desperate plan.”
Holmes said compared with Wyndham, Choice has less organic growth and “a less vibrant loyalty program and virtually no international capabilities.”
CEO Geoff Ballotti said Choice has a “declining pipeline” while Wyndham’s is growing.
Holmes added that Wyndham’s standalone plan has “multiple levers of growth” and is a more compelling value proposition than Choice’s buyout offer.
Ballotti also said Choice’s offer did not include market-volatility protection, which Wyndham considers necessary. He said Choice demands “creative and appropriate protections for shareholders.”
Ballotti added that Choice’s offer is now worth less than when it was originally proposed because Choice’s stock price dropped after making its buyout proposal public. Choice’s stock was trading at about $110.50 per share Thursday, down from $124.90 on Oct. 16, the day before Choice made its acquisition offer public.
Choice on Wednesday issued a press release calling on Wyndham “to engage in good faith discussions so that shareholders of both companies can benefit from the compelling combination.” Pacious said Choice is willing to include market protections for Wyndham shareholders.
“We respect Wyndham’s desire to achieve the best outcome for its shareholders, but that can’t happen if Wyndham unilaterally ends our discussions,” Pacious said in a statement. “Choice is ready to move expeditiously to negotiate binding terms, including mechanisms to provide market standard protections for Wyndham shareholders.”
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