Wyndham Hotels and Resorts shares climbed 9% in midday trading on Tuesday following a nearly $10 billion hostile takeover bid from Choice Hotels International.
The move comes after six months of failed negotiations aimed at merging the two companies to form one of the largest budget hotel operators in the United States.
Choice Hotels, which had previously made two offers, decided to go public with its hostile bid after Wyndham walked away from late-stage discussions.
Wyndham's board rejected the latest offer, though, saying it undervalues the company’s potential for growth and would be subject to a lengthy regulatory review.
Choice's latest offer stands at $90 per share, comprising $49.50 in cash and the remaining in stock, thereby valuing Wyndham's equity at $7.8 billion. The offer also includes the assumption of Wyndham's $2 billion debt and is 30% higher than Wyndham's closing share price on Monday.
The proposed merger would significantly expand the companies' global footprint. Choice Hotels operates 7,827 hotels worldwide, mostly in the US, while Wyndham has around 9,100 hotels with 845,000 rooms. Both companies utilise a franchised business model.