PR Newswire | October 18, 2023
Choice Hotels International, Inc. announced a proposal to acquire all the outstanding shares of Wyndham Hotels & Resorts, Inc. at a price of $90.00 per share, payable in a mix of cash and stock.
Under Choice's proposal, the $90.00 per share to be received by Wyndham shareholders would consist of $49.50 in cash and 0.324 shares of Choice common stock for each Wyndham share they own. Choice's proposal represents a 26% premium to Wyndham's 30-day volume-weighted average closing price ending on October 16, 2023, an 11% premium to Wyndham's 52-week high, and a 30% premium to Wyndham's latest closing price. In addition, Choice's proposal includes a cash or stock election mechanism, which would provide Wyndham shareholders with the ability to choose either cash, stock, or a combination of cash and stock consideration, subject to a customary proration mechanism. The proposal implies a total equity value for Wyndham of approximately $7.8 billion on a fully diluted basis. With the assumption of Wyndham's net debt, the proposed transaction is valued at approximately $9.8 billion.
Choice is making its latest proposal public following Wyndham's decision to disengage from further discussions with Choice, following nearly six months of dialogue.
Patrick Pacious, President and Chief Executive Officer of Choice Hotels, said, "We have long respected Wyndham's business and are confident that this combination would significantly accelerate both Choice's and Wyndham's long-term organic growth strategy for the benefit of all stakeholders. For franchisees, the transaction would bring Choice's proven franchisee success system to a broader set of owners, enabling them to benefit from Choice's world-class reservation platform and proprietary technology to drive cost savings and greater investment returns. Additionally, the value-driven leisure and business traveler would benefit from the combined company's rewards program, which would be on par with the top two global hotel rewards programs, enabling them to receive greater value and access to a broader selection of options across stay occasions and price points."
"A few weeks ago, Choice and Wyndham were in a negotiable range on price and consideration, and both parties have a shared recognition of the value opportunity this potential transaction represents. We were therefore surprised and disappointed that Wyndham decided to disengage. While we would have preferred to continue discussions with Wyndham in private, following their unwillingness to proceed, we feel there is too much value for both companies' franchisees, shareholders, associates, and guests to not continue pursuing this transaction. Importantly, we remain convinced of both the many benefits of the combination and our ability to complete it," concluded Pacious.
The proposed transaction is expected to provide important benefits for both companies' stakeholders – franchisees, shareholders, associates, and guests – that will be particularly significant in the current uncertain economic climate:
Franchisees Win with Lower Total Cost of Ownership and Increased Hotel Profitability.
Capitalizes on Choice's proven franchisee success system, dedicated to driving incremental topline reservation delivery to hotel owners' properties, while lowering the total cost of hotel operations.
Nearly doubles the resources available to spend on marketing and driving direct bookings to franchisees' hotels, lowering the cost of customer acquisition.
Establishes an even larger rewards member base on par with the top two global programs in hospitality.
Drives more business to franchisees through lower cost direct booking channels, lower customer acquisition commissions and fees, and lower hotel operating costs and technology-driven labor efficiencies, while continuing to determine their own commercial and pricing strategy.
Improves the value of franchisees' real estate assets by enhancing applicable cap rates and cash flows resulting from affiliation with the proforma company.
Reduces friction by offering guests a broad portfolio of brands across segments, no matter their stay occasions, within a single system.
Promotes increased investment and innovation in proprietary technology systems, processes, and training at the hotel and corporate level, which drives returns for Choice franchisees.
Creates an opportunity to replicate the tremendous success of Choice's recent acquisition of Radisson Hotel Group Americas. During the integration of the nearly 600 Radisson Americas hotels into the Choice platform, Radisson's franchisees have already meaningfully benefited from increased guest traffic to direct and digital channels, improvement in conversion rates, and access to more corporate accounts, among other benefits.
Shareholders Win with Superior Value Creation.
Represents a 26% premium to Wyndham's 30-day volume-weighted average closing price ending on October 16, 2023, an 11% premium to the 52-week high, and a 30% premium to the latest closing price.
Anticipates meaningful annual run-rate synergies, estimated at approximately $150 million, through the rationalization of operational redundancies, duplicate public company costs, and topline growth potential.
Enables Wyndham shareholders to benefit from Choice's historically 3x higher EBITDA multiple on a go-forward basis and receive deferred tax treatment on their stock consideration.
Creates additional capacity to further support Choice's revenue intense strategy, ultimately helping drive growth across its organic revenue levers.
Generates predictable high free cash flow through an asset-light, fee-for-service model, providing resiliency through all economic cycles and enabling additional investments for future growth.
Offers Wyndham two seats on the combined company's board and Wyndham shareholders the opportunity to participate in the significant upside potential of the combined company.
Cash/stock consideration mechanism enables Wyndham shareholders to choose between immediate upfront proceeds or long-term value creation, subject to a customary proration mechanism.
Guests Win with More Lodging Options and Value.
Creates a combined rewards program on par with the top two global programs in hospitality and will offer best-in-class program benefits through partnerships and compelling hotel redemption options.
Builds a global network of brands and hotels that meets the needs of the value-driven traveler across geographies, stay occasions and price points, supported by a seamless reservation system that provides guests with a more effective and efficient booking and shopping experience.
Improves data analytics, enabling the combined company to personalize communications and tailor recommendations to best meet the needs of the up to 160 million combined rewards program members.
Associates Win with Expanded Opportunities and Increased Stability.
Offers the ability to retain and attract "best-in-class" talent to one of the world's premier hotel companies focused on employee well-being, bringing together a wide range of experience and deep industry expertise.
Provides more opportunities for advancement and career growth as part of a larger, more diversified organization.
Combines two performance-driven cultures with a continued emphasis on associate development and growth.
RECENT ENGAGEMENT OVERTURES
Choice has been engaging with Wyndham for nearly six months.
In April 2023, Choice sent its initial letter to Wyndham regarding a potential transaction, proposing to acquire Wyndham for $80.00 per share, comprising 40% cash and 60% Choice stock. The proposal represented a 20% premium to the closing price of Wyndham common stock on April 27, 2023, and a 19% premium over Wyndham's 30-day volume-weighted average share price as of such date. Wyndham rejected the proposal and refused to engage in further discussions.
In the days and weeks thereafter, Choice continued to attempt engagement with Wyndham, increasing its proposal to $85.00 per share, comprising 55% cash and 45% Choice stock, explaining that further discussions could clarify Wyndham's hesitation to proceed with negotiations. The companies' respective Board Chairs and CEOs then met in person, and following that meeting, Choice improved its proposal yet again. Choice made its best and final offer which represented an increase of the per-share consideration to $90.00, comprising 55% cash and 45% Choice stock.
In September 2023, the Choice and Wyndham Board Chairs continued engagement, along with each of their respective financial and legal advisors. Wyndham acknowledged the strategic rationale of the proposal and that terms were within a negotiable range but raised questions regarding the value of Choice stock and timing for obtaining regulatory approvals. In response, Choice proposed to enter into a one-way, short-term non-disclosure agreement to facilitate Choice providing information that would address Wyndham's concerns (a draft of which was subsequently sent to Wyndham) and made its external counsel available for several discussions. However, during a follow-up call between the Chair of each company's Board and their respective advisors, Wyndham made clear their unwillingness to proceed with further discussions.
FINANCING, CONDITIONS AND APPROVALS
Closing of the contemplated transaction would be subject to satisfaction of customary closing conditions, including receipt of required shareholder and regulatory approvals. Choice would not make this offer if it were not confident that its franchisees and guests would embrace the proposed combination and that the transaction would receive applicable regulatory approvals in due course.
The cash portion of the purchase price is expected to be funded with a combination of cash on hand, as well as proceeds from the issuance of debt securities. Choice is highly confident in its ability to obtain fully committed financing based on indications from two separate bulge bracket global banks for the entire cash portion of our proposal. Strong free cash flows will allow for continued investments in the proforma business and rapid deleveraging of the balance sheet.
About Choice Hotels
Choice Hotels International, Inc. is one of the leading lodging franchisors in the world. Choice® has nearly 7,500 hotels, representing almost 630,000 rooms, in 46 countries and territories. A diverse portfolio of 22 brands that range from full-service upper upscale properties to midscale, extended stay and economy enables Choice® to meet travelers' needs in more places and for more occasions while driving more value for franchise owners and shareholders. The award-winning Choice Privileges® loyalty program and co-brand credit card options provide members with a fast and easy way to earn reward nights and personalized perks.
Hyatt Hotels | September 22, 2023
Hyatt Hotels Corporation embarks on a strategic expansion journey with over 30 luxury and lifestyle hotels planned for the Americas by 2025.
The brand's rapid growth includes doubling luxury room inventory and increasing lifestyle rooms, making it a premier choice for high-end travelers.
The strategic acquisitions of Mr & Mrs Smith and Dream Hotel Group enhance Hyatt's offerings for members of the World of Hyatt.
The Hyatt Hotels Corporation has strengthened the brand with ambitious plans to expand its luxury and lifestyle presence throughout the Americas. With a robust development pipeline encompassing more than 30 planned hotels and resorts slated for completion by 2025, Hyatt is poised to make a significant impact. This strategic initiative includes venturing into new markets, reflecting the company's unwavering commitment to enhancing its brand offerings. Over the past half-decade, Hyatt has achieved remarkable milestones on a global scale, including doubling luxury room inventory, tripling the number of resort rooms, and quadrupling the availability of lifestyle rooms. The momentum behind this growth shows no signs of abating. Hyatt now proudly stands as the fastest-growing luxury portfolio, with luxury, lifestyle, and resort properties constituting over 40% of its extensive portfolio. This success solidifies Hyatt's position as the ultimate choice for discerning high-end travelers seeking unparalleled experiences.
This brand expansion has new properties in sought-after destinations, including the Hyatt Centric Santo Domingo in the Dominican Republic, Cas en Bas Beach Resort in Saint Lucia, and Hyatt Centric Querétaro in Mexico. Additionally, Hyatt is introducing Boundless Collection hotels, featuring Thompson Hotels in various U.S. and Mexican locations. Timeless Collection hotels will offer a home away from home experience, with Park Hyatt Los Cabos in Mexico and Grand Hyatt Scottsdale in Arizona among the highlights. The Inclusive Collection will welcome new resorts in the Caribbean and Mexico, including Secrets St. Lucia Resort & Spa and more. Several luxury and lifestyle Hyatt hotels have recently opened in the Americas, with exciting additions like Andaz Mexico City Condesa and Dreams Flora Resort & Spa in Punta Cana. The Fordson Hotel in Oklahoma City will soon join The Unbound Collection by Hyatt.
Hyatt's transformative growth journey extends further through strategic acquisitions that enhance the offerings for its valued guests and members. The recent acquisition of Mr & Mrs Smith, a global travel platform renowned for its curated collection of boutique and luxury properties, is a testament to Hyatt's commitment to delivering exceptional experiences. This move significantly enriches the choices available to World of Hyatt members, providing them with an even more comprehensive array of rewarding stays and memorable experiences. In addition to this, Hyatt's earlier acquisition of Dream Hotel Group in early 2023 has opened up new horizons for World of Hyatt members, enabling them to access an expanded portfolio of stay options and lifestyle experiences in vibrant destinations like Nashville, Hollywood, South Beach, and New York City.
Additionally, this acquisition catalyzes Hyatt's brand expansion into an emerging leisure market in Mexico, with the upcoming Dream Valle de Guadalupe (slated for 2024). Nestled across 35 sprawling acres in the picturesque Baja California region, this property will feature a sprawling vineyard, 61 well-appointed guestrooms and villas, a luxurious spa and wellness facility, and a trio of vibrant dining and nightlife venues, including an exclusive tasting room and pool bar.
Sonesta Hotels | November 06, 2023
Sonesta International Hotels Corporation has launched a new service called Travel SOS to help travelers during holiday travel disruptions by providing information on room availability at the nearest Sonesta hotels.
The service can be accessed via a dedicated hotline or online using a promo code, offering convenience and flexibility to travelers.
Despite potential limitations such as room availability and location coverage, the initiative underscores Sonesta's commitment to exceptional service during peak travel times, potentially enhancing customer satisfaction and loyalty.
Sonesta International Hotels Corporation launches a new service, Travel SOS (Sonesta Overnight Stay), aimed at easing the stress of holiday travel disruptions. The service provides stranded travelers with information on room availability at the nearest Sonesta hotels during the busy holiday season. Travelers can access the service via a dedicated hotline or by using a promo code online. The initiative underscores Sonesta's commitment to exceptional service during peak travel times, offering peace of mind to travelers across its diverse portfolio of 17 brands and over 1,200 properties.
Chris Trick, the Chief Marketing Officer at Sonesta, reportedly conveyed his optimism about the Travel SOS solution. He emphasized that Travel SOS exemplifies Sonesta's dedication to delivering superior service to travelers, especially during peak and challenging travel periods. He noted that the service, accessible via phone or online, offers up-to-date information on over 1,200 Sonesta properties, thereby providing travelers with reassurance. This allows them to relax and fully enjoy the holiday season.
The new Travel SOS service launched by Sonesta International Hotels Corporation has its own set of potential drawbacks and benefits. On the downside, the service might be limited by the availability of rooms at Sonesta hotels, especially during peak travel times. If all rooms are booked, the service may not be able to provide the desired assistance. Additionally, the service might be less useful for travelers who are stranded in locations where Sonesta hotels are not present.
On the upside, the service is designed to ease the stress of holiday travel disruptions by providing stranded travelers with information on room availability at the nearest Sonesta hotels. This is useful throughout the holidays. The service can be accessed via a dedicated hotline or by using a promo code online, offering convenience and flexibility to travelers. Furthermore, the initiative underscores Sonesta's commitment to exceptional service during peak travel times, potentially enhancing customer satisfaction and loyalty.
Travel SOS is crafted to be accessed with dial-to-book or click-to-book options, a dedicated Travel SOS hotline and a promo code STAYSOS for online reservations using Sonesta’s website's offers’ section.