HomeMarket News Wyndham Hotels & Resorts pares big gain on report it rejected Choice...

Wyndham Hotels & Resorts pares big gain on report it rejected Choice Hotels offer Wyndham Hotels & Resorts Rejects $7.8B Takeover Offer from Choice Hotels International

Actionable Trade Ideas

always free

Digitally Generated Currency and Exchange Stock Chart for Finance and Economy Based Computer Software and Coding Display

Wyndham Hotels & Resorts (NYSE:WH) has reportedly rejected a $7.8B takeover offer from Choice Hotels International (NYSE:CHH), as stated in a bear hug letter received early on Tuesday. According to The Wall Street Journal, WH executives believe that the offer undervalues the company, and have concerns about the inclusion of Choice Hotels stock in the deal.

Discussions between the two hotel companies have been ongoing since Choice Hotels made its initial offer in April.

This is what Choice Hotels’ takeover offer entails: The acquisition would be funded through a mix of cash and stock. Under the proposed terms, Wyndham shareholders would receive $49.50 in cash and 0.324 shares of Choice common stock for each Wyndham share they own, valuing the offer at a 26% premium to Wyndham’s 30-day volume-weighted average closing price ending on October 16. The offer also represents an 11% premium to Wyndham’s 52-week high and a 30% premium to its latest closing price. The proposal includes a cash or stock election mechanism, giving Wyndham shareholders the choice of cash, stock, or a combination of both. On a fully diluted basis, the total equity value for Wyndham would be approximately $7.8B, and when accounting for Wyndham’s net debt, the proposed transaction is valued at approximately $9.8B.

In response to the news, shares of Wyndham Hotels & Resorts (WH) initially surged more than 20% in premarket trading, but later pared back those gains to reflect a 10.38% increase at 11:28 a.m. Choice Hotels (CHH) saw a decrease of 4.70% in its share price.

More on Choice Hotels and Wyndham Hotels & Resorts

Swing Trading Ideas and Market Commentary

Need some new swing ideas? Get free weekly swing ideas and market commentary from Jonathan Bernstein here: Swing Trading.

Explore More

Weekly In-Depth Market Analysis and Actionable Trade Ideas

Get institutional-level analysis and trade ideas to take your trading to the next level, sign up for free and become apart of the community.