Choice Hotels (CHH.N) on Tuesday made its latest $7.8 billion cash-and-stock offer public after Wyndham Hotels and Resorts (WH.N) decided to walk away from merger talks, halting six months of discussions around creating a U.S. budget hotel giant.
Choice's offer of $90.00 per share, including $49.50 in cash and 0.324 shares of its common stock for each share held, represents about a 30% premium to Wyndham's last closing price.
Shares of Wyndham jumped as much as 22% to $84.30 after the news, but pared gains to settle at $78 before the bell. The company did not immediately respond to a Reuters request for a comment.
A potential combination would marry Choice Hotels' brands such as Econo Lodge, Quality Inn and Clarion with Wyndham's Days Inn and Travelodge, offering inflation-hit customers a wide choice of affordable hotels.
Choice first approached Wyndham in April with an $80 per share offer, which it later bumped up to $85 in May. Both companies were within a "negotiable range" on price a few weeks ago, Choice said on Tuesday.
"We were therefore surprised and disappointed that Wyndham decided to disengage," Choice added.
Rockville, Maryland-based Choice, which has nearly 7,500 hotels in 46 countries and territories, has found unit growth challenging and has turned to acquisitions to grow, UBS analysts have said.
Meanwhile, New Jersey-based Wyndham operates and franchises a hotel portfolio of 24 brands that are primarily located in secondary and tertiary cities, according to its annual filing.
Reuters reported in May about a potential deal between the two companies.
As of Monday's close, Choice had a total market capitalization of $6.29 billion, while Wyndham's stood at $5.82 billion.
