Wyndham’s Attempted InterContinental Hotels Group (IHG) Takeover Bid

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Back in late May, Sky News reported (read more here) that InterContinental Hotels Group’s (IHG) board had declined a takeover bid from an unnamed US hotel company.

Wyndham & IHG Proposed Merger

At the time, many were speculating that the company would have been Starwood, but it turned out to be Wyndham according to the information by Sky News (access here).

Wyndham & IHG Proposed Merger Sky News

Wyndham has 7,500 hotels under mainly middle to lower end hotel brands such as Ramada and Travelodge.

Here are some tidbits from the Sky News piece:

The owner of the Ramada hotel chain was the mystery suitor behind a recent £6bn takeover offer for the FTSE-100 hospitality provider InterContinental Hotels Group (IHG), Sky News can reveal.

Wyndham Worldwide Corporation, which is the world’s biggest hotel operator with 7,500 sites, made a preliminary offer to acquire IHG in a deal that would have united leading industry brands such as Holiday Inn, Travelodge, Knights Inn and Crowne Plaza.

Sources said this weekend that Wyndham’s initial approach to combine with IHG, which was made earlier this year, had been rebuffed and was no longer live, but suggested that it could subsequently be revived.

Wyndham is understood to have been examining a merger with IHG as a means of pursuing a so-called inversion, under which its tax domicile would have switched to the UK to take advantage of favourable corporate tax rates.

Such deals have become an important driver of trans-Atlantic mergers and acquisitions activity.

Conclusion

It is difficult for me to see how this merger could have benefited IHG Rewards Club loyalty program members. Wyndham Rewards is very unexciting program that has zero elite benefits beyond additional points for staying 20 nights year (max 3 times).

If the merger goes through at some point, however unlikely it is at this point, the combined hotel would be too heavy on the middle/lower end of hotel brands and very thin at the high end (InterContinental brand only really).

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