In mid-October 2023, Choice proposed acquiring Wyndham. Wyndham’s board rejected this takeover attempt, so Choice is now attempting a hostile takeover, including buying outstanding shares of Wyndham and trying to appoint someone to the company’s board.
Continue reading: Choice Wants To Acquire Wyndham In Hostile Takeover
Share your questions, experiences, and thoughts below.
Can DOJ block hostile takeover on antitrust ground? I bet a regular merger will be blocked by DOJ. Maybe this was an under-the-table deal to avoid DOJ lawsuits?
They have already “consulted” with DoJ to address possible anti-trust concerns. I assume that they would still face a block as the current administration is pretty hell-bent against M&A activity that is far less gray than this.
That said, I think Pacious’ points on franchisees dictating pricing is pretty powerful. Ultimately, the parent brands are in the business of collecting royalties, managing brand standards and selling property owners on flying their flag.
My guess is that this gets entertaining for a short while before Choice increases its bid and Wyndham acquiesces.
Lina Khan will then sue and lose, unless the current administration is not in place by the time it plays out. ,
Seems that one of the largest owner groups is also opposed https://aahoa.com/public/storage/2023/11/22/cms/20231017-aahoa-expresses-high-concerns-over-possible-merger-of-choice-hotels-and-wyndham.pdf
DOJ (or FTC) doesn’t care one bit whether it is a friendly merger or a hostile takeover. The antitrust issues (or lack thereof in some cases) have nothing to do with whether it is a friendly or hostile deal.
Just curious to know where you read that DOJ has been “consulted”? I assume your use of quotes means unofficial guidance?
I don’t care one way or the other but I would imagine the conversion of valuable Wyndham points (Vacasa, Caesar etc) into Choice points would not benefit Wyndham loyalists. Probably something like 3 Choice points for 2 Wyndham points
The lousiest hotel brand wants to acquire the second lousiest hotel brand...
I suspect things going on in the back office the public isn't privy to
With a 50% market share, I can't see this going through.
As an aside: Wyndham hotels are ass.
We had a wonderful stay at TRYP by Wyndham Wellington, New Zealand this Summer. We have an upcoming La Quinta by Wyndham Santiago Aeropuerto. Wyndham has a few acceptable options but I'm not sure about Choice.
I agree with your analogy.
Wouldn’t you want a premium brand in your portfolio for bragging rights and as a hedge if there’s a down turn in the economy. This is more like paying a premium for less than middle of the road.
Maybe it’s all about swelling the volume of franchise fees since neither actually owns many properties.
In the long run, it may be better to cull a few brands to ward off lawsuits from multiple franchisees who claim their territories have been infringed upon while working under one roof.