Oct 17, 2023 - Economy

Choice Hotels offers to buy rival Wyndham for $7.8 billion

Dan Primack

Illustration of a hotel door with a "do not disturb" sign in the shape of an arrow — Illustration: Sarah Grillo/Axios

Choice Hotels on Tuesday said that it has offered to buy larger rival Wyndham Hotels and Resorts for around $7.8 billion in cash and stock.

Why it matters: This would be a megamerger in the budget hotel space, with a combined entity encompassing around 16,800 properties under such brands as Radisson, Quality Inn, Days Inn, Ramada, and Travelodge.

Details: Choice is offering the equivalent of $90 per share, representing a 30% premium to yesterday's closing price, consisting of $49.50 per share in cash and 0.324 shares of Choice common stock.

Including assumed debt, the deal value would climb to around $9.8 billion.

The bottom line: Choice says that the two sides had been discussing a merger for months, and that it decided to announce its intensions after Wyndham ended negotiations.

[Update: Wyndham said on Tuesday afternoon that its board has rejected Choice's offer, calling it "underwhelming" and saying that it "involves significant business and execution risks, including an extended regulatory timeline and uncertainty of outcome, potential franchisee churn, and excessive leverage levels at the pro forma combined company."]

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Choice Hotels offers to buy rival Wyndham for $7.8 billion

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