Wyndham Hotels & Resorts (NYSE:WH) stock is on the rise Tuesday as investors react to news of a takeover bid for the hotel company.
Choice Hotels International (NYSE:CHH) is seeking to acquire Wyndham in a deal worth $9.8 billion when including the company’s current debt. This would value WH stock at $90 per share, which is an 30% premium over its prior closing price.
Choice Hotels International intends to use a mix of cash and stock to fuel its acquisition of Wyndham Hotels & Resorts. That would see shareholders of WH stock receive $49.50 in cash and 0.324 shares of CHH stock for each share of WH that they own.
Investors will note that Choice has been in talks with Wyndham about this deal for close to six months now. The company says it’s making the proposal public as Wyndham has ended further discussions about the deal.
WH Stock Acquisition Commentary
Patrick Pacious, President and CEO of Choice Hotels International, said the following about the offer:
“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.”
WH stock is up 12.9% as of Tuesday morning.
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
