Choice Hotels said on Wednesday that it had asked the board of US budget hotel operator Wyndham Hotels and Resorts to engage in merger talks.
This comes about a week after Wyndham rejected Choice's $7.8 billion (€7.38 billion) acquisition offer, deeming it "underwhelming" and citing regulatory risks around a potential deal.
'Negotiable Range'
"We respect Wyndham's desire to achieve the best outcome for its shareholders, but that can't happen if Wyndham unilaterally ends our discussions," Choice CEO Patrick Pacious said.
Choice said it first approached Wyndham in April with an $80 per share offer, which it later bumped up to $85. Both companies were within a "negotiable range" on the price a few weeks ago, the Rockville, Maryland-based company said last week.
It said on Wednesday that it was ready to move expeditiously to negotiate the terms for a deal.
Wyndham
Wyndham, whose brands include Days Inn and Travelodge, operates and franchises a hotel portfolio of 24 brands that are primarily located in secondary and tertiary cities, according to its annual filing.
Wyndham was formed in 2018. Wyndham Worldwide spun off its $11 billion (€10.4 billion) hotel business to create two separate publicly-traded hospitality companies.
Wyndham Worldwide is now known as Travel + Leisure and focuses on timeshare resorts.
Choice Hotels
Choice Hotels, which operates brands like Econo Lodge, Quality Inn and Clarion, franchises more than 7,000 hotels and caters to customers in the mid-scale to upscale range.
US Budget Hotel Giant
It was previously reported that Choice Hotels International was seeking to buy Wyndham Hotels & Resorts in a deal that would create a US budget hotel giant, a person familiar with the matter told Reuters on Tuesday 23 May.
It was not clear whether Wyndham was interested in pursuing a tie-up with Choice, the source said, requesting anonymity as these discussions are confidential.
If Wyndham decides not to proceed with a deal, Choice Hotels could choose to go hostile and take an offer directly to Wyndham's shareholders, the source said.
