As the travel industry expands, Choice Hotels bids roughly $8 billion for larger rival Wyndham Hotels & Resorts.

Wyndham Hotels & Resorts.
As the travel industry expands, Choice Hotels bids roughly $8 billion

Following Wyndham’s termination of negotiations, Choice Hotels International is requesting approval from Wyndham Hotels & Resorts’ shareholders for a proposed $8 billion purchase, the firm announced on Tuesday.

 

According to Choice CEO Patrick Pacious, “Wyndham and Choice were in a negotiating range on price and consideration a few weeks ago. Both sides have a shared understanding of the value opportunity this possible acquisition represents. “Therefore, Wyndham’s decision to end the engagement surprised and upset us. After Wyndham decided against moving further, we would have preferred to continue our conversations privately, but we believe this deal offers too much benefit to the franchisees, shareholders, associates, and customers of both businesses to give up now.

A request for comment made early on Tuesday went unanswered by Wyndham.

For each Wyndham share that you own, Choice, a company based in Rockville, Maryland, will pay you $49.50 in cash and 0.324 shares of Choice common stock. This is a 20% premium over Wyndham’s most recent closing price.

Company Details

Industry                                                                                       Sector                                                                
Hotels                                                                                    Leisure/Arts/Hospitality

Fiscal Year End                                                                            Revenue                                                                         

12/2023                                                                                      $1.51B
Sales Growth                                                                                Employees
-4.28%                                                                                          2,500

Valuation

P/E Current17.79
P/E Ratio (w/ extraordinary items)20.28
P/E Ratio (w/o extraordinary items)18.24
Price to Sales Ratio4.29
Price to Book Ratio6.40
Price to Cash Flow Ratio16.23
Enterprise Value to EBITDA13.00
Enterprise Value to Sales5.45
Total Debt to Enterprise Value0.25

Profitability

Gross Margin42.72%
Operating Margin34.57%
Pretax Margin31.52%
Net Margin23.51%
Return on Assets8.46%
Return on Equity34.62%
Return on Total Capital16.74%
Return on Invested Capital11.48%

Efficiency

Revenue/Employee$599,200
Income Per Employeee$142,000
Receivables Turnover6.13
Total Asset Turnover0.36

Capitalization

Total Debt to Total Equity217.05
Total Debt to Total Capital68.46
Total Debt to Total Assets50.64
Long-Term Debt to Equity214.24
Long-Term Debt to Total Capital67.57

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