Take it from me, a former high school mock trial and literary magazine nerd who wasn’t exactly the star of the football team: Unrequited love usually never works.
Just ask Choice Hotels.
On Monday, the hotel company behind brands like Comfort Inn and the Radisson Americas portfolio finally walked away from its $8 billion hostile takeover attempt of Wyndham Hotels & Resorts. The deal seemed like a long shot for some time and not just because Wyndham’s leadership team balked at the idea of selling to Choice.
The Asian American Hotel Owners Association — the leading hotel ownership group in the U.S. — conducted a survey during the drawn-out takeover saga, and a majority of Wyndham franchisees polled said the takeover would hurt their business.
There was also thinking that the government wouldn’t let Wyndham and Choice merge because it would eliminate a competitor in the increasingly consolidated hotel industry — especially after a federal judge blocked the attempted JetBlue and Spirit merger.
Others in the industry thought Wyndham was simply holding out for a better offer since the company sits atop a hefty portfolio of brands with affordable hotel rooms, which is increasingly the area all the major hotel brands want to play in.
Alas, this lopsided love was not meant to be.
“Since beginning this process in April 2023, Choice has attempted to engage in good-faith negotiations with Wyndham through numerous different avenues… Given Wyndham’s refusal to constructively and substantively engage on terms, Choice took the extraordinary step of launching the exchange offer to initiate the regulatory review process and engage with Wyndham stockholders,” reads a statement from Choice Hotels. “…Choice has decided not to extend the exchange offer and is withdrawing its slate. Choice intends to continue focusing on its standalone strategy, which the Company is confident will create significant long-term value for its stockholders and franchisees.”
Wyndham’s leadership team doesn’t appear to be that bothered by the idea of the Choice takeover attempt going away. Choice walking away arrives mere weeks after Wyndham leaders started an investor call noting a variety of reasons why the deal should not happen, including how many hotel owners within both companies were considering dropping their brand affiliation if the takeover happened.
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“Wyndham is focused on moving ahead with the execution of our strategic plan, building on our success and generating meaningful value,” Wyndham CEO Geoff Ballotti said in a statement Monday. “We look forward to doing so without the unnecessary distraction of this situation and disruption to our business. We would like to thank our shareholders and franchisees for their continued support and our team members for their dedication and focus throughout this process.”
What happens now?
Both Choice and Wyndham emphasized standalone strategies going forward, and several investor analyst reports touted international growth as an ideal opportunity for Choice.
There is also chatter that takeover attempts in this budget-friendly segment of the hotel industry aren’t done. Private buyers could emerge or even yet another hotel company.
After all, Hilton, Marriott and IHG have all signaled major interest over the last year with brand launches that target a similar customer base as Choice and Wyndham’s.
This budget brand bonanza is far from over.
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