Choice Hotels Tries Another Time With Wyndham

The DJIA fell 405 points while Nasdaq was down 268, the S&P 500 was down 52 points and the 10 year treasury yield was down .08 to 4.14%. Everyone was wondering what caused the market drop. The Fed meets this week and there are still plenty out there thinking they will lower interest rates (we don’t). Lodging stocks were mixed. HST, RLJ and H traded up to new highs again while SVC and CHH traded down to new lows. CHH wound up jumping 5% after the new low. AINC was down -8% and SOND was down -5% on the day.

Choice Hotels issued a press release urging Wyndham stockholders to tender their shares before the March 8 deadline. We would characterize the press release as a combination of begging WH shareholders to threaten they will pull the plug. Either way, our main takeaway from the release, particularly the comment that "Choice intends to either extend or terminate the exchange officer and will evaluate next steps related to its nomination of a slate of independent directors for election to the board of directors of Wyndham" as a sure sign they are not getting anywhere near the support they would like. We can’t see how they can include in the press release that their offer is $90 when it consists of CHH stock and that stock was hitting new 52 week lows each day. CHH stocks bounced off of lows after a Truist investor called them, with Truist saying they believe the stock was up because they reiterated that they believe they can get the deal done without any changes. Truist does not think CHH is abandoning the merger, which is kind of self explanatory if Truist thinks the stock is up due to CHH thinking they can get the deal done as is. All we can say is the plot thickens.

Deutsche Bank analyzed the latest STR RevPAR data, particularly since they started including Las Vegas. DB estimates LV has added 180 bps year over year to US RevPAR 1Q to date a