8-K
CHOICE HOTELS INTERNATIONAL INC /DE false 0001046311 0001046311 2020-07-23 2020-07-23

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 23, 2020

 

 

CHOICE HOTELS INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-13393   52-1209792

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification Number)

 

1 Choice Hotels Circle, Suite 400, Rockville, Maryland   20850
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (301) 592-5000

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class

 

Trading

Symbol(s)

 

Name of Each Exchange

on Which Registered

Common Stock, Par Value $0.01 per share   CHH   New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 8.01.

Other Events.

On July 23, 2020, Choice Hotels International, Inc. (the “Company”) issued a press release announcing the early tender results and an increase in the maximum aggregate tender amount from $180,000,000 to $183,429,000 for its previously announced cash tender offer (the “Offer”) to purchase $180,000,000 of its 5.750% Senior Notes due 2022 (the “Notes”). The terms and conditions of the Offer are set forth in the offer to purchase, dated July 9, 2020.

As of 5:00 p.m., New York City Time, on July 22, 2020 (such date and time, the “Early Tender Time”), $183,429,000 aggregate principal amount of the Notes had been validly tendered and not validly withdrawn in the Offer. Since the Offer for the Notes was fully subscribed as of the Early Tender Time, the Company will not accept for purchase any Notes validly tendered after the Early Tender Time. The Offer will expire at 12:00 midnight, New York City Time, at the end of August 5, 2020, unless earlier terminated.

On July 23, 2020, the Company also issued a press release announcing the pricing terms of its previously announced Offer and its acceptance of all Notes validly tendered and not validly withdrawn prior to the Early Tender Time.

The announcements related to the Offer are neither an offer to purchase nor a solicitation of an offer to sell the Notes. The Offer is being made solely by means of the offer to purchase that the Company distributed to holders of the Notes.

 

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits.

The following exhibits are filed herewith:

 

99.1    Press Release, dated July 23, 2020
99.2    Press Release, dated July 23, 2020
104    Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

      CHOICE HOTELS INTERNATIONAL, INC.
Date: July 23, 2020      

/s/ Dominic E. Dragisich

      Dominic E. Dragisich
      Chief Financial Officer
EX-99.1

EXHIBIT 99.1

 

LOGO

For Immediate Release

Choice Hotels: Scott Oaksmith, Senior Vice President, Real Estate and Finance

Allie Summers, Director, Executive Reporting and Investor Relations

Email: IR@choicehotels.com

CHOICE HOTELS ANNOUNCES EARLY TENDER RESULTS AND INCREASE IN AGGREGATE

MAXIMUM TENDER AMOUNT OF TENDER OFFER FOR ITS OUTSTANDING 5.750% SENIOR

NOTES DUE 2022

ROCKVILLE, Md. (July 23, 2020) — Choice Hotels International, Inc. (NYSE: CHH) (the “Company”) announced today the early tender results for its previously announced tender offer (the “Tender Offer”) to purchase for cash up to an aggregate principal amount of $180,000,000 of its 5.750% Senior Notes due 2022 (the “Notes”). Additionally, the Company announced today that it has amended the Tender Offer by increasing the aggregate maximum tender amount from $180,000,000 to $183,429,000 (as amended, the “Aggregate Maximum Tender Amount”).

 

Title of

Note

   CUSIP
Number
   Principal
Amount
Outstanding
   U.S. Treasury
Reference
Security
  Bloomberg
Reference
Page
   Fixed Spread    Early Tender
Premium

(per
$1,000)
   Principal
Amount
Tendered at
Early Tender
Time

5.750%

Senior

Notes

due

2022

   169905 AE6    $400,000,000    0.125%
UST due
06/30/2022
  FIT1    +165 bps    $50    $183,429,000

The terms and conditions of the Tender Offer are set forth in the offer to purchase, dated July 9, 2020, as amended by this press release (as the same may be amended or supplemented, the “Offer to Purchase”). The Tender Offer will expire at 12:00 midnight, New York City Time, at the end of August 5, 2020, unless earlier terminated.

As of 5:00 p.m., New York City Time, on July 22, 2020 (such date and time, the “Early Tender Time”), according to information provided by D.F. King & Co., Inc., the tender and information agent for the Tender Offer, the aggregate principal amount of the Notes set forth in the table above under “Principal Amount Tendered at Early Tender Time” had been validly tendered and not validly withdrawn in the Tender Offer. Withdrawal rights for the Notes expired at 5:00 p.m., New York City Time, on July 22, 2020.

The “Total Consideration” for each $1,000 principal amount of Notes validly tendered and accepted for purchase pursuant to the Tender Offer will be determined in the manner described in the Offer to Purchase by reference to the fixed spread for the Notes specified in the table above plus the yield based on the bid-side price of the U.S. Treasury Reference Security specified in the table above at 10:00 a.m., New York City Time, today, and is inclusive of the Early Tender Premium as set forth in the table above.

The Company expects to announce the pricing of the Tender Offer and the amount of Notes accepted for purchase later today.


Only holders of Notes who validly tendered and did not validly withdraw their Notes at or prior to the Early Tender Time are eligible to receive the Total Consideration for the Notes accepted for purchase. Holders of Notes will also receive accrued and unpaid interest on their Notes validly tendered and accepted for purchase from the last interest payment date up to, but not including, the settlement date.

The Company expects to satisfy the financing condition to the Tender Offer later today and, on July 24, 2020, expects to pay for the Notes that were validly tendered prior to or at the Early Tender Time and that are accepted for purchase.

Since the Tender Offer for the Notes was fully subscribed as of the Early Tender Time, the Company will not accept for purchase any Notes validly tendered after the Early Tender Time. Because the aggregate principal amount of the Notes validly tendered and not validly withdrawn prior to the Early Tender Time does not exceed the Aggregate Maximum Tender Amount, the Company expects to accept for purchase all such tendered Notes.

Information Relating to the Tender Offer

Wells Fargo Securities, LLC, J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC are serving as the dealer managers for the Tender Offer. Investors with questions regarding the Tender Offer may contact Wells Fargo Securities, LLC at (704) 410-4759 (collect) or (866) 309-6316 (toll-free) or liabilitymanagement@wellsfargo.com, J.P. Morgan Securities LLC at (212) 834-2042 (collect) or (800) 834-4666 (toll-free) or Goldman Sachs & Co. LLC at (212) 357-1452 (collect) or (800) 828-3182 (toll-free).

None of the Company or its affiliates, their respective boards of directors, the dealer managers, the tender and information agent or the trustee with respect to the Notes is making any recommendation as to whether holders should tender any Notes in response to the Tender Offer, and neither the Company nor any such other person has authorized any person to make any such recommendation. Holders must make their own decision as to whether to tender any of their Notes, and, if so, the principal amount of Notes to tender.

This press release is for informational purposes only and is not an offer to buy, or the solicitation of an offer to sell, any of the Notes and the Tender Offer does not constitute an offer to buy or the solicitation of an offer to sell the Notes in any jurisdiction or in any circumstances in which such offer or solicitation are unlawful. The full details of the Tender Offer are included in the Offer to Purchase. Holders are strongly encouraged to carefully read the Offer to Purchase, including materials incorporated by reference therein, because they contain important information. The Offer to Purchase may be obtained from D.F. King & Co., Inc., free of charge, by calling (212) 269-5550 (collect, for banks and brokers) or (800) 967-7510 (toll-free, for all others), or by email to chh@dfking.com.

###

About Choice Hotels®

Choice Hotels International, Inc. (NYSE: CHH) is one of the largest lodging franchisors in the world. With more than 7,100 hotels, representing more than 590,000 rooms, in over 40 countries and territories as of March 31, 2020, the Choice® family of hotel brands provides business and leisure travelers with a range of high-quality lodging options from limited service to full-service hotels in the upscale, midscale, extended-stay and economy segments. The award-winning Choice Privileges® loyalty program offers members benefits ranging from everyday rewards to exceptional experiences. For more information, visit www.choicehotels.com.


Forward-Looking Statements

When used within this press release, the words “expects,” “believes,” “anticipates,” “plans,” “would,” “should,” “may,” “estimates,” and similar expressions are intended to identify “forward-looking statements,” including but not limited to, statements about the Company’s ability to complete the Tender Offer and reduce its outstanding debt within expected time-frames or at all, and other risks and uncertainties described in the Offer to Purchase. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results to be materially different from those expressed or implied in the forward-looking statements. Such factors include the risks detailed in the Company’s filings with the Securities and Exchange Commission, including our annual report on Form 10-K and our quarterly reports on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.

© 2020 Choice Hotels International, Inc. All rights reserved.

EX-99.2

EXHIBIT 99.2

 

LOGO

For Immediate Release

Choice Hotels: Scott Oaksmith, Senior Vice President, Real Estate and Finance

Allie Summers, Director, Executive Reporting and Investor Relations

Email: IR@choicehotels.com

CHOICE HOTELS ANNOUNCES PRICING OF ITS TENDER OFFER FOR UP TO

$183,429,000 OF ITS OUTSTANDING 5.750% SENIOR NOTES DUE 2022

ROCKVILLE, Md. (July 23, 2020) — Choice Hotels International, Inc. (NYSE: CHH) (the “Company”) announced today the consideration payable in connection with its previously announced tender offer (the “Tender Offer”) to purchase for cash up to an aggregate principal amount of $183,429,000 (the “Aggregate Maximum Tender Amount”) of its 5.750% Senior Notes due 2022 (the “Notes”), as described in the table below.

 

Title of

Note

   CUSIP
Number
   Principal
Amount
Outstanding
   U.S. Treasury
Reference
Security
  Reference
Yield
  Fixed Spread    Early Tender
Premium

(per $1,000)
   Total
Consideration

(per $1,000)

5.750%

Senior

Notes

due

2022

   169905 AE6    $400,000,000    0.125%
UST due
06/30/2022
  0.151%   +165 bps    $50    $1,074.79

The Tender Offer was made on the terms and conditions set forth in the offer to purchase, dated July 9, 2020, (as amended and as may be further amended or supplemented, the “Offer to Purchase”). The Tender Offer will expire at 12:00 midnight, New York City Time, at the end of August 5, 2020, unless earlier terminated.

The “Total Consideration” for each $1,000 principal amount of Notes validly tendered and accepted for purchase pursuant to the Tender Offer was determined in the manner described in the Offer to Purchase by reference to the fixed spread for the Notes specified in the table above plus the yield based on the bid-side price of the U.S. Treasury Reference Security specified in the table above at 10:00 a.m., New York City Time, today, and is inclusive of the Early Tender Premium set forth in the table above.

Only holders of Notes who validly tendered and did not validly withdraw their Notes at or prior to 5:00 p.m., New York City Time, on July 22, 2020 (such date and time, the “Early Tender Time”) are eligible to receive the Total Consideration for the Notes accepted for purchase. Holders of Notes will also receive accrued and unpaid interest on their Notes validly tendered and accepted for purchase from the last interest payment date up to, but not including, the settlement date. Withdrawal rights for the Notes expired at 5:00 p.m., New York City Time, on July 22, 2020. On July 24, 2020, the Company expects to pay for the Notes that were validly tendered prior to or at the Early Tender Time and that are accepted for purchase.

Since the Tender Offer for the Notes was fully subscribed as of the Early Tender Time, the Company will not accept for purchase any Notes validly tendered after the Early Tender Time. Because the aggregate principal amount of the Notes validly tendered and not validly withdrawn prior to the Early Tender Time does not exceed the Aggregate Maximum Tender Amount, the Company has accepted for purchase all such tendered Notes.


Information Relating to the Tender Offer

Wells Fargo Securities, LLC, J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC are serving as the dealer managers for the Tender Offer. Investors with questions regarding the Tender Offer may contact Wells Fargo Securities, LLC at (704) 410-4759 (collect) or (866) 309-6316 (toll-free) or liabilitymanagement@wellsfargo.com, J.P. Morgan Securities LLC at (212) 834-2042 (collect) or (800) 834-4666 (toll-free) or Goldman Sachs & Co. LLC at (212) 357-1452 (collect) or (800) 828-3182 (toll-free).

None of the Company or its affiliates, their respective boards of directors, the dealer managers, the tender and information agent or the trustee with respect to the Notes is making any recommendation as to whether holders should tender any Notes in response to the Tender Offer, and neither the Company nor any such other person has authorized any person to make any such recommendation. Holders must make their own decision as to whether to tender any of their Notes, and, if so, the principal amount of Notes to tender.

This press release is for informational purposes only and is not an offer to buy, or the solicitation of an offer to sell, any of the Notes and the Tender Offer does not constitute an offer to buy or the solicitation of an offer to sell the Notes in any jurisdiction or in any circumstances in which such offer or solicitation are unlawful. The full details of the Tender Offer are included in the Offer to Purchase. Holders are strongly encouraged to carefully read the Offer to Purchase, including materials incorporated by reference therein, because they contain important information. The Offer to Purchase may be obtained from D.F. King & Co., Inc., free of charge, by calling (212) 269-5550 (collect, for banks and brokers) or (800) 967-7510 (toll-free, for all others), or by email to chh@dfking.com.

###

About Choice Hotels®

Choice Hotels International, Inc. (NYSE: CHH) is one of the largest lodging franchisors in the world. With more than 7,100 hotels, representing more than 590,000 rooms, in over 40 countries and territories as of March 31, 2020, the Choice® family of hotel brands provides business and leisure travelers with a range of high-quality lodging options from limited service to full-service hotels in the upscale, midscale, extended-stay and economy segments. The award-winning Choice Privileges® loyalty program offers members benefits ranging from everyday rewards to exceptional experiences. For more information, visit www.choicehotels.com.

Forward-Looking Statements

When used within this press release, the words “expects,” “believes,” “anticipates,” “plans,” “would,” “should,” “may,” “estimates,” and similar expressions are intended to identify “forward-looking statements,” including but not limited to, statements about the Company’s ability to complete the Tender Offer and reduce its outstanding debt within expected time-frames or at all, and other risks and uncertainties described in the Offer to Purchase. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results to be materially different from those expressed or implied in the forward-looking statements. Such factors include the risks detailed in the Company’s filings with the Securities and Exchange Commission, including our annual report on Form 10-K and our quarterly reports on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.

© 2020 Choice Hotels International, Inc. All rights reserved.

v3.20.2
Document and Entity Information
Jul. 23, 2020
Cover [Abstract]  
Entity Registrant Name CHOICE HOTELS INTERNATIONAL INC /DE
Amendment Flag false
Entity Central Index Key 0001046311
Document Type 8-K
Document Period End Date Jul. 23, 2020
Entity Incorporation State Country Code DE
Entity File Number 001-13393
Entity Tax Identification Number 52-1209792
Entity Address, Address Line One 1 Choice Hotels Circle
Entity Address, Address Line Two Suite 400
Entity Address, City or Town Rockville
Entity Address, State or Province MD
Entity Address, Postal Zip Code 20850
City Area Code (301)
Local Phone Number 592-5000
Written Communications false
Soliciting Material false
Pre Commencement Tender Offer false
Pre Commencement Issuer Tender Offer false
Security 12b Title Common Stock, Par Value $0.01 per share
Trading Symbol CHH
Security Exchange Name NYSE
Entity Emerging Growth Company false