Choice Hotels (NYSE:CHH) is becoming more aggressive in its $8 billion bid to acquire Wyndham Resorts (NYSE:WH). Reuters reported that Choice, now a Wyndham shareholder, aims to nominate directors to the Board of Wyndham Hotels & Resorts.
Moreover, Choice plans to increase its stake in Wyndham, which would grant it the right to nominate directors to Wyndham’s board in January. If Wyndham rejects Choice’s acquisition talks, Choice may turn the shareholder meeting into a referendum for investors on whether negotiations can take place.
As a part of this strategy, Choice is already interviewing board nominees and preparing a tender offer for Wyndham shares. While Wyndham has expressed its willingness to engage with Choice, it has cited concerns about the hospitality company’s takeover bid of a cash-and-stock offer of $90 per share.
According to Wyndham, this bid is too low as it values the company that operates brands such as Ramada, Super 8, and Microtel at $86 per share (based on Choice’s latest share price). As a result, Wyndham is seeking a higher cash component in the offer price.
Is CHH Stock a Good Buy?
Analysts remain sidelined about CHH stock with a Hold consensus rating based on two Buys, three Holds, and two Sells. CHH stock has increased by more than 4% year-to-date, and the average CHH price target of $128.86 implies an upside potential of 13.1% at current levels.
