Wyndham Hotels & Resorts, Inc. (NYSE:WH) rose modestly in early trading Monday (+0.5%) following reports from Reuters that rival Choice Hotels (NYSE:CHH) is preparing to nominate a slate of directors to the board after its recent takeover overtures were thwarted.
Choice Hotels has also been buying shares of Wyndham Hotels in the open market and seeks to raise its stake, the report added.
In mid-October, Choice Hotels went public with a $90 per share cash and stock offer for Wyndham Hotels. This was its third offer for the company. It had previously offered $85 per share in May 2023 and $80 per share in April 2023.
Because of the variability of the stock component, the latest offer is valued at about $86 per share for Wyndham shareholders.
Wyndham's board has consistently thwarted the takeover attempts, saying a takeover is not in the best interests of Wyndham or its shareholders.
With its latest board move, this gives Choice the option to nominate directors to Wyndham's board come January. If Wyndham's board is replaced at the annual shareholder meeting in the spring, it could give the potential takeover bid new life.
Sources indicated that Choice could drop its plans to take over the board if Wyndham moves to negotiate a deal.