(Reuters) – Budget hotel operator Choice Hotels International on Tuesday commenced an exchange offer for the shares of Wyndham Hotels & Resorts and said it was preparing to nominate candidates to the board of the takeover-target.
Wyndham was not immediately available for a comment on Tuesday.
Reuters had reported about Choice preparing to challenge Wyndham’s board in November.
Choice has been attempting to break a stalemate in an about $8 billion takeover deal that would combine two of the biggest budget hotel operators in the United States.
This comes at a time when domestic travel is moderating in the face of high inflation, which might reduce consumer spending on travel and increase demand for budget hotels such as Choice and Wyndham.
Choice went public with a cash-and-stock offer of $90 per share for Wyndham in October, after the latter privately rebuffed its takeover attempts. Choice had first approached Wyndham with an $80-per-share offer in April.
Wyndham rejected Choice’s latest revised bid arguing that it continues to undervalue its business. It said it was concerned about the slower growth prospects of Choice’s business and the high amount of debt the combined company would have.
Wyndham had also cited antitrust scrutiny from U.S. regulators as one of the reasons for turning down Choice’s offer and indicated it is only willing to engage if all its concerns are addressed.
(Reporting by Aatreyee Dasgupta and Ananta Agarwal in Bengaluru; Editing by Shilpi Majumdar)
