Wyndham Hotels & Resorts Inc. WH said Tuesday a letter it has received from Choice Hotels International Inc. CHH represents step backwards and the terms outlined are neither in Wyndham’s interest or those of its shareholders. Choice launched a hostile bid for Wyndham in October, offering to take it over at $90 a share in stock and cash. “Choice’s first communication in a month since its public disclosure of its unsolicited proposal contains no change to the form of consideration and continues to undervalue Wyndham’s standalone growth prospects,” Wyndham said in a statement. Based on Choice’s current stock price, the offer has a value of $86 a share, below the nominal $90 a share offer first proposed. “The letter proposes a two-year period for Choice to seek to obtain regulatory approvals supported only by a low 6% reverse termination fee, which would both create a prolonged period of limbo and expose Wyndham and its shareholders to significant asymmetrical risk,” said the hotel operator. Given they now explicitly acknowledge the legitimate issues around the regulatory timeline, “they are essentially asking our shareholders to take on serious risk and accept as compensation for a failed deal a low reverse termination fee that doesn’t even begin to compensate for the potential lost earnings and long-term impairment to value that could occur during an uncertain two-year regulatory review,” said Wyndham Chairman Stephen P. Holmes in a letter to the Choice board. Wyndham’s stock was down 1.2% premarket Tuesday, while Choice’s stock was up 0.9%.
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