Choice Hotels International Inc. has proposed eight independent, highly qualified individuals to stand for election at the 2024 Annual Shareholder Meeting of Wyndham Hotels & Resorts Inc.
Early this afternoon, Wyndam’s board of directors responded to Choice’s proposal.
Stewart W. Bainum, chair, Choice’s board of directors, said, “These nominees are proven leaders with wide-ranging expertise across relevant industries, including deep proficiency in the hospitality and franchising sectors. We are confident the nominees’ industry, finance, governance and board experience will greatly benefit Wyndham shareholders. Most importantly, if elected, the nominees will exercise their independent judgment to serve Wyndham shareholders’ best interests, which Choice believes is to move with urgency to maximize the value that could be created for them through a combination with Choice.”
Patrick Pacious, president/CEO, Choice, said, “With this slate of independent, highly qualified candidates for election to the Wyndham board, Wyndham shareholders will have an opportunity to be represented by a board that will fulfill its fiduciary duty to act in the shareholders’ best interests and consider any and all paths to create value. Unfortunately, the current Wyndham board continues to refuse to engage in meaningful negotiations regarding a combination with Choice that would create extraordinary value. By supporting these nominees and participating in our exchange offer, Wyndham shareholders can send a clear message to the Wyndham board.”
The nominees proposed by Choice understand the nuances of the franchising model and the increasing pressure franchisees face from rising operating costs, larger hotel chains and dominant online travel agencies—pressures that will only mount as the lodging sector becomes even more competitive with new brand entrants, according to the company. The nominees are:
- Barbara Bennett, founder/principal executive, Bennett West LLC
- Emanuel Pearlman, chair/CEO, Liberation Investment Group
- Fiona Dias, chief strategy officer, ShopRunner
- James Nelson, CEO, Global Net Lease Inc.
- Jay Shah, executive chair of the board of trustees, Hersha Hospitality Trust
- Nana Mensah, founder/chair/CEO, ‘XPORTS Inc.
- Susan Schnabel, founder/co-managing partner, aPriori Capital Partners
- William Grounds, principal, Burraneer Capital Advisors LLC
Moelis & Company LLC, Goldman Sachs & Co. LLC and Wells Fargo are serving as financial advisors to Choice and Willkie Farr & Gallagher LLP and Axinn, Veltrop & Harkrider LLP are serving as legal advisors.
Wyndham responds
The Wyndham board of directors issued the following statement in response to Choice’s proposal:
“This action is yet another attempt by Choice to advance its inadequate and risk-laden hostile exchange offer, which the Wyndham board unanimously determined is not in the best interests of shareholders. Wyndham’s board and management team are executing the company’s strategic plan, which is expected to deliver shareholder value well in excess of Choice’s offer.
“Choice’s proxy contest is a blatant scheme to mislead shareholders into packing the Wyndham board with nominees hand-picked to push through their offer. As Stewart Bainum, controlling shareholder and chairman of Choice, brazenly telegraphed in a press release this morning, Choice has assembled and paid a slate with a sole, dubious goal in mind: advance Choice’s misguided and self-serving acquisition agenda.
“Protecting Wyndham shareholders from an unsolicited proposal that substantially undervalues the company and exposes it to significant, asymmetrical anti-trust risk is the very definition of a board doing its job. This is why the board has met on at least 10 occasions to evaluate Choice’s proposals, and the board and our advisors have engaged in good faith with Choice at least 25 times since Choice’s first approach in April. The board has consistently been explicit about what changes are necessary to make any proposal viable for Wyndham and its shareholders. Choice has consistently refused to address these key issues.
“The Wyndham board is fully committed to acting in the best interests of Wyndham shareholders. We will continue to take all appropriate actions to advance and protect these interests. This includes maintaining a strong, independent board with the right mix of perspectives and experience to drive sustainable, profitable growth and value creation. The Wyndham Board brings decades of international hospitality and travel industry experience as well as expertise in key areas critical to the execution of our strategy, including franchise businesses, M&A, law, operations, finance, accounting, marketing and media. We are confident we have the right board composition to position Wyndham for continued long-term success and value creation.”
In accordance with its established processes, the board will thoroughly evaluate the notice and Choice’s nominees and make a formal recommendation to Wyndham shareholders in due course.
The Wyndham Board continues to recommend shareholders not tender their shares.
Deutsche Bank Securities Inc. and PJT Partners are serving as financial advisors and Kirkland & Ellis LLP and Arnold & Porter Kaye Scholer LLP are legal advisors to Wyndham.
