At this point, Reuters reports discussions between the two hotel groups are still in the preliminary stages and Wyndham has not yet signaled whether it is interested in pursuing a deal with Choice, and The Journal says no serious talks are underway.
However, should Wyndham choose not to proceed with a deal, Choice Hotels may elect to take a hostile offer directly to Wyndham's shareholders, the source said, speaking on condition of anonymity.
An acquisition would join two hotel giants, both of which have extensive portfolios in the budget hotel sector. Together they would form North America’s largest franchisor of economy hospitality brands.
Choice franchises 22 brands such as Quality Inn, MainStay, Comfort, Econo Lodge and Clarion with a total of 7,467 properties. Wyndham has a portfolio of some 9,100 properties under 24 brands, including Super 8, La Quinta and Ramada, the Days Inn and Wyndham.
Still, several hotel industry analysts have express skepticism that any serious offer will develop, given the current economic outlook and Choice Hotels’ well-publicized strategy to expand its portfolio in the higher-end hospitality sector.
So far, both companies have declined to comment on the reports.
Image: Courtesy of Choice
