WYNDHAM COMMENTS ON CHOICE'S SELF-SERVING DIRECTOR NOMINATIONS
- None.
- Choice's proxy contest is a blatant scheme to mislead shareholders into packing the Wyndham Board with nominees hand-picked to push through their offer. Protecting Wyndham shareholders from an unsolicited proposal that substantially undervalues the Company and exposes it to significant, asymmetrical anti-trust risk is the very definition of a Board doing its job. The Board has consistently been explicit in evaluating Choice's proposals and engaging in good faith with Choice at least 25 times since Choice's first approach in April.
Insights
The attempted nomination of directors by Choice Hotels International to the Wyndham Board represents a strategic maneuver in the hospitality industry that could have significant implications for shareholder value. The response from Wyndham's Board suggests a strong belief that the current strategic plan will yield greater returns than the offer from Choice. This situation warrants a close examination of the market positioning and performance metrics of both Wyndham and Choice. Market trends, competitive dynamics and potential synergies should be analyzed to understand the full impact of this offer on the industry landscape.
Given the reference to 'significant, asymmetrical anti-trust risk,' there is a need to scrutinize the regulatory environment and the potential hurdles any merger could face. This includes understanding the market share post-merger and the degree to which it might attract regulatory scrutiny or require divestitures. The long-term strategic fit and the potential for operational efficiencies should also be evaluated against the backdrop of the current market conditions and future industry projections.
The unanimous rejection of Choice's offer by Wyndham's Board indicates a confidence in intrinsic value and growth prospects that surpass the proposed terms. Financial analysts should dissect the valuation metrics used by both companies, such as price-to-earnings ratios, revenue growth rates and EBITDA margins, to assess the fairness of the offer. The 'inadequate and risk-laden' description by Wyndham suggests that the premium on the current share price might be insufficient when considering the company's future earnings potential and the present value of expected cash flows.
Investors should be aware of the potential for stock volatility in the short term as the market reacts to these developments. The long-term financial implications are equally critical, with considerations around how the acquisition could affect the combined entity's balance sheet, cost structure and revenue streams. An analysis of precedent transactions within the hospitality sector could provide additional context to the offer's attractiveness relative to industry norms.
The mention of 'anti-trust risk' highlights the legal complexities inherent in such a merger. It is crucial to understand the legal precedents and the current regulatory climate to gauge the likelihood of a successful acquisition. The legal team would need to analyze previous cases of hospitality mergers and the outcomes, particularly where anti-trust issues were a concern. This includes examining the Federal Trade Commission (FTC) and Department of Justice (DOJ) guidelines on horizontal mergers and the Herfindahl-Hirschman Index (HHI) scores that measure market concentration.
Furthermore, the legal ramifications of a proxy fight for control of the board should be considered. The process of nominating and electing directors has legal stipulations that both parties must adhere to and any missteps could have serious consequences. The legal strategies employed by both Wyndham and Choice in this battle could set precedents for future corporate governance disputes in the sector.
Nominees Selected to Rubber-Stamp Choice's Underwhelming and Risk-Laden Offer
Board Remains Open to an Offer That is in Best Interests of Wyndham and its Shareholders
"This action is yet another attempt by Choice to advance its inadequate and risk-laden hostile exchange offer, which the Wyndham Board unanimously determined is not in the best interests of shareholders. Wyndham's Board and management team are executing the Company's strategic plan, which is expected to deliver shareholder value well in excess of Choice's offer.
"Choice's proxy contest is a blatant scheme to mislead shareholders into packing the Wyndham Board with nominees hand-picked to push through their offer. As Stewart Bainum, controlling shareholder and Chairman of Choice, brazenly telegraphed in a press release this morning, Choice has assembled and paid a slate with a sole, dubious goal in mind: advance Choice's misguided and self-serving acquisition agenda.
"Protecting Wyndham shareholders from an unsolicited proposal that substantially undervalues the Company and exposes it to significant, asymmetrical anti-trust risk is the very definition of a Board doing its job. This is why the Board has met on at least 10 occasions to evaluate Choice's proposals and the Board and our advisors have engaged in good faith with Choice at least 25 times since Choice's first approach in April. The Board has consistently been explicit about what changes are necessary to make any proposal viable for Wyndham and its shareholders. Choice has consistently refused to address these key issues.
"The Wyndham Board is fully committed to acting in the best interests of Wyndham shareholders. We will continue to take all appropriate actions to advance and protect these interests. This includes maintaining a strong, independent Board with the right mix of perspectives and experience to drive sustainable, profitable growth and value creation. The Wyndham Board brings decades of international hospitality and travel industry experience as well as expertise in key areas critical to the execution of our strategy, including franchise businesses, M&A, law, operations, finance, accounting, marketing and media. We are confident we have the right Board composition to position Wyndham for continued long-term success and value creation."
In accordance with its established processes, the Board will thoroughly evaluate the notice and Choice's nominees and make a formal recommendation to Wyndham shareholders in due course.
The Wyndham Board continues to recommend shareholders NOT tender their shares.
Deutsche Bank Securities Inc. and PJT Partners are serving as financial advisors and Kirkland & Ellis LLP and Arnold & Porter Kaye Scholer LLP are legal advisors to Wyndham.
Additional materials and facts are available at https://www.staywyndham.com/.
About Wyndham Hotels & Resorts
Wyndham Hotels & Resorts (NYSE: WH) is the world's largest hotel franchising company by the number of properties, with approximately 9,100 hotels across over 95 countries on six continents. Through its network of approximately 858,000 rooms appealing to the everyday traveler, Wyndham commands a leading presence in the economy and midscale segments of the lodging industry. The Company operates a portfolio of 24 hotel brands, including Super 8®, Days Inn®, Ramada®, Microtel®, La Quinta®, Baymont®, Wingate®, AmericInn®, Hawthorn Suites®, Trademark Collection® and Wyndham®. The Company's award-winning Wyndham Rewards loyalty program offers approximately 105 million enrolled members the opportunity to redeem points at thousands of hotels, vacation club resorts and vacation rentals globally. For more information, visit www.wyndhamhotels.com. The Company may use its website as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Disclosures of this nature will be included on the Company's website in the Investors section, which can currently be accessed at https://investor.wyndhamhotels.com. Accordingly, investors should monitor this section of the Company's website in addition to following the Company's press releases, filings submitted with the Securities and Exchange Commission and any public conference calls or webcasts.
Important Additional Information
This press release is not an offer to purchase or a solicitation of an offer to sell any securities or the solicitation of any vote or approval. Wyndham Hotels & Resorts, Inc. ("Wyndham" or the "Company") has filed with the
The Company intends to file a proxy statement and accompanying WHITE proxy card with the SEC with respect to the Company's 2024 Annual Meeting of Stockholders (the "2024 Annual Meeting"). The Company's stockholders are strongly encouraged to read such proxy statement, the accompanying WHITE proxy card and other documents filed with the SEC carefully in their entirety when they become available because they will contain important information. The Company's stockholders will be able to obtain any proxy statement, any amendments or supplements to the proxy statement and other documents filed by the Company with the SEC free of charge at the SEC's website at www.sec.gov. Copies will also be available free of charge at the Company's website at https://investor.wyndhamhotels.com.
Certain Information Concerning Participants
Wyndham and certain of its directors and executive officers may be deemed to be participants in the solicitation of proxies under the rules of the SEC. Information regarding the Company's directors and officers and their respective interests in the Company by security holdings or otherwise is available in its most recent Annual Report on Form 10-K filed with the SEC on February 16, 2023 and its most recent definitive Proxy Statement on Schedule 14A filed with the SEC on March 28, 2023. To the extent holdings of the Company's securities have changed since the filing of the Company's most recent Annual Report on Form 10-K or the Company's most recent definitive Proxy Statement on Schedule 14A, such changes have been reflected on Statements of Change in Ownership on Form 4 filed with the SEC. Updated information relating to the foregoing will also be set forth in the Company's proxy statement and other materials to be filed with the SEC for its 2024 Annual Meeting. These documents can be obtained free of charge from the sources indicated above.
Cautionary Statement on Forward-Looking Statements
Certain statements either contained in or incorporated by reference into this press release, other than purely historical information, and assumptions upon which those statements are based, are "forward-looking statements." Forward-looking statements include those that convey management's expectations as to the future based on plans, estimates and projections at the time Wyndham makes the statements and may be identified by words such as "will," "expect," "believe," "plan," "anticipate," "intend," "goal," "future," "outlook," "guidance," "target," "objective," "estimate," "projection" and similar words or expressions, including the negative version of such words and expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of Wyndham to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of hereof.
Factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation: factors relating to the offer; general economic conditions, including inflation, higher interest rates and potential recessionary pressures; the effects from the coronavirus pandemic, including the impact on Wyndham's business, as well as the impact on its franchisees, guests and team members, the hospitality industry and overall demand for and restrictions on travel; the performance of the financial and credit markets; the economic environment for the hospitality industry; operating risks associated with the hotel franchising business; Wyndham's relationships with franchisees; the impact of war, terrorist activity, political instability or political strife, including the ongoing conflicts between
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SOURCE Wyndham Hotels & Resorts
FAQ
What is the notice received by Wyndham from Choice Hotels International, Inc. regarding the Board of Directors?
What is the response of the Wyndham Board to Choice's notice?
How many times has the Wyndham Board evaluated Choice's proposals?
