Choice Hotels CEO sees 'opportunity' in Wyndham bid
Choice Hotels (CHH) shares have come under pressure due to the company's multiple bid attempts for Wyndham Hotel and Resorts (WH), the latest being a hostile bid.
Choice Hotels International CEO and President Patrick Pacious joins Yahoo Finance Live to discuss the challenges ahead for the $8 billion bid and why he thinks the two companies could work well together.
Pacious feels “very confident” in the growth of the business, despite the pressure on the stock and sees an “opportunity” to work with Wyndham. Pacious remains optimistic about how consumers will benefit from this merge.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Video Transcript
- Walk us through this because as this deal, as this battle has really played out for much of this year, your stock has come under pressure. Why do you think that's the case?
PATRICK PACIOUS: Sure, Brian. As you're well aware, when you have an announcement like we did in October, you're going to get a lot of technical trading in the stocks, and that's expected. What we feel really good about is the growth of our company. We're firing on all cylinders right now.
As a business, we have grown our earnings by 44% over the last four years. We've already guided towards another 10% growth next year. So we feel very confident in the growth of our business and in the way our stock is valued. What we're looking to do here is really bring a combined entity together that creates effectively $2 billion of shareholder value for both sets of shareholders once we get a deal completed.
- Pat, this does feel like it's starting to become a little personal. Let's say this deal does go through. Do you think you can work effectively with that management team?
PATRICK PACIOUS: We can. These are our deal negotiations. Everybody knows they can be tough at times and laborious, and getting through the work here is important. But we know that management team well. We respect that management team. We like what they've created. It's the reason we want to make a combination of both companies together. And we see an opportunity on the other side of this to continue to work in tandem with them.
- What's the biggest headwind preventing this deal from getting done in your view? Is it macro issues, or is it something idiosyncratic here?
PATRICK PACIOUS: At the end of the day, we think it's a misalignment between their shareholders, who we've been talking to for the past two months, and what the board is doing. And so this opportunity, along with a potential proxy contest that would begin in the coming months here, the window opens in January, really gives us the opportunity to take this offer directly to their shareholders and let the shareholders decide on whether or not they want to see the compelling value creation, which we can create, plus it brings a huge amount of value to the combined company's franchisees who also benefit in a significant way.
