Choice Hotels International on Monday scrapped its nearly year-long pursuit of rival Wyndham Hotels & Resorts , after repeated rejections and failing to garner enough support from Wyndham‘s shareholders for its hostile bid.
Choice said its exchange offer to buy Wyndham’s shares has expired and it is withdrawing its nominations of director candidates for Wyndham’s board.
Choice first approached Wyndham in April last year and disclosed its cash-and-stock offer in October. Based on the closing share price of the companies on Friday, the offer was worth $89 per share, or about $7.2 billion.
In December, Choice appealed directly to Wyndham’s shareholders to break a stalemate in the takeover battle, by unveiling an exchange offer for Wyndham’s stock. Choice also nominated a slate of directors to replace Wyndham’s eight-member board, Reuters reported.
Wyndham has repeatedly rebuffed Choice’s bid as low-premium and fraught with antitrust risk. Wyndham, based in Parsippany, New Jersey, also raised concerns about the combined company carrying too much debt, and a slowdown in Choice’s business.
A tie-up between Choice and Wyndham would have created a US budget hotel giant, competing with upscale operators like Hilton Worldwide and Marriott International which have made a push in recent years to enter the budget segment.
Rockville, Maryland-based Choice operates nearly 7,500 hotels in 46 countries in the upper-midscale and upscale segments, including brands such as Radisson, Country Inn & Suites, and Cambria Hotels. Wyndham, which franchises about 9,100 hotels in more than 95 countries, operates budget brands such as Travelodge, Ramada, Days Inn and Microtel.
“While the support from Wyndham stockholders tendering into the exchange offer was significant considering the number of investors structurally prevented from participating at this stage, it was not sufficient for Choice to conclude … that a path towards a transaction is available at this time,” Choice said in a statement.
Choice’s exchange offer received the support of less than 20 per cent of Wyndham’s shareholders, people familiar with the matter said. Choice said it will now focus on its standalone strategy and that its board had boosted the company’s share buyback authorization by five million shares, or about $600 million.
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Shares of Choice rose more than 4 per cent in afternoon trade, while Wyndham gained more than 1 per cent.
Wyndham has said that it could achieve a higher valuation on its own, projecting compounded annual growth in adjusted earnings before interest, taxes, depreciation and amortization of between 7 per cent and 10 per cent through 2026. Its adjusted EBITDA growth had reached 6 per cent, the company recently said.
On Monday, Wyndham welcomed Choice’s withdrawal of its tender offer and slate of directors. “We are confident in Wyndham’s standalone strategy and growth prospects under the leadership of our proven management team,” said Wyndham Chairman Stephen Holmes.
Ending the takeover bid could benefit Choice, Jefferies analyst David Katz wrote in a note, upgrading the hotel operator to “buy” from “underperform.”
“We do not see it completely impossible that CHH could come back in with another offer should WH’s shares languish at these levels for another year,” said Patrick Scholes, analyst at Truist Securities.
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Saudi Arabia announced its plans to bid to host the 2034 World Cup, the latest step in a campaign to turn the kingdom into a global sports powerhouse.
The bid “intends to deliver a world-class tournament and will draw inspiration from Saudi Arabia’s ongoing social and economic transformation and the country’s deep-rooted passion for football“, said a statement from the Saudi Arabian football federation.
News of the bid comes one year after neighbouring Qatar hosted the first World Cup in the Middle East, where the Saudi national team scored a stunning group stage victory over eventual winners Argentina.
The Saudi announcement came an hour after world football’s governing body FIFA released a statement giving its plans for the 2030 World Cup and inviting countries in the Asian Football Confederation (AFC) to bid for 2034.
The United Arab Emirates (UAE) is considering implementing a visa system that would allow residents to travel easily to other Gulf Cooperation Council (GCC) nations, including Saudi Arabia. The proposed system aims to facilitate free movement within the bloc and could be introduced in the near future. Currently, foreign residents in the GCC countries often require visas to cross borders, while citizens of the bloc can travel freely.
On the heels of the Qatar tournament, Saudi Arabia signed Cristiano Ronaldo to play in the Saudi Pro League, the first in a slew of major stars drawn by eye-watering salaries to the world’s biggest crude oil exporter.Sport is a major component of Crown Prince Mohammed bin Salman’s Vision 2030 reform agenda, which aims to transform Saudi Arabia into a tourism and business hub while transitioning the economy away from fossil fuels.
Spending spree
In the coming weeks, the kingdom is set to host the final LIV Golf League tournament of the regular season, a boxing match featuring Anthony Joshua and the Next Gen ATP Finals tennis tournament.
It will also host the FIFA Club World Cup in December.
Earlier this year Saudi Arabia was confirmed as host of football’s 2027 Asian Cup.
That event will enable Saudi officials to improve on existing football infrastructure, with new “world-class stadiums” constructed “in the most sustainable ways”, Saudi football federation president Yasser Al Misehal said on Wednesday.
Saudi Arabia previously explored a tri-continental World Cup bid with Egypt and Greece, though that plan has been shelved.
This collaboration will help unite both private and public sectors in a concerted effort to create a sustainable framework for growth. Additionally, it seeks to promote community empowerment and inclusion while jointly addressing crisis preparedness, management, and recovery, drawing from the valuable lessons learned during the Covid-19 pandemic
The new Saudi-only bid means fans would face “maximum three-hour flying times between cities and stadiums”, Misehal said.
Riyadh’s willingness to spend hundreds of millions of dollars on sporting events has drawn accusations of “sportswashing”, using sport to distract from oft-criticised human rights abuses.
In an interview with Fox News last month, Prince Mohammed dismissed those attacks, saying “I will continue doing sportswashing” if it will benefit the Saudi economy.
Prince in spotlight
Hosting the World Cup would ratchet up scrutiny of the 38-year-old de facto ruler, who critics accuse of consolidating power through a fierce crackdown on dissent, including one recent case in which a retired teacher was sentenced to death for critical social media posts.
Prince Mohammed told Fox he was “ashamed” of that verdict.
Like Qatar, Saudi Arabia would take heat for outlawing homosexuality and for its treatment of migrant workers, said Kristin Diwan of the Arab Gulf States Institute in Washington.
“Still, there is a growing sense of inevitability to the emerging centrality of the Gulf region to the sport,” she said.
World Cup-related construction could also draw a backlash from environmental activists who sounded the alarm last year after Saudi Arabia was awarded hosting rights for the 2029 Asian Winter Games, a 47-event competition to be held in Trojena, an area of the planned $500 billion futuristic megacity known as NEOM.
At the time, Greenpeace questioned how plans for Trojena — including a man-made freshwater lake, chalets, mansions and ultra-luxury hotels — could possibly be sustainable.
But Riyadh would be keen to use the World Cup as a showcase for various natural attractions, dispelling the notion that Saudi Arabia is one giant desert.
Misehal, the football federation president, said on Wednesday that fans would be drawn to “our mountains, our islands and of course our culture”, adding: “Everything will be connected with state-of-the-art facilities to guarantee an amazing fan experience.”
The Asian Football Confederation came out in support of the Saudi 2034 World Cup bid shortly after it was announced on Wednesday.
“The entire Asian football family will stand united in support of the Kingdom of Saudi Arabia’s momentous initiative, and we are committed to working closely with the global football family to ensure its success,” said AFC President Sheikh Salman bin Ibrahim Al Khalifa.
The Jeddah-based Organisation of Islamic Cooperation also called on its 57 member states to back the bid.
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