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Wyndham hit as it pulls $200m stock issue

Wyndham Worldwide has shelved plans to issue up to $200 million in stock, wiping almost 30 percent of its share price.

The plan was withdrawn in response to the “strongly negative” market reaction, Wyndham Chairman and Chief Executive Stephen Holmes said in a statement.He said the company, which operates chains included Ramada, Days Inn, Travelodge and Super 8, would continue to actively manage its business to maximize cash flow from operations and strengthen its financial position.
“We have adequate liquidity to meet the operating needs of the business,” he added.
Wyndham shares fell $1.76 to $4.18 on the New York Stock Exchange after hedge fund manager Leon Cooperman criticized the proposed offering.
Cooperman described the possibility that Wyndham would issue stock at prices below previous buybacks was “ridiculous.”
“You don’t want to look a year from now, having bought back stock at $30 and issued stock at $5 or $6, and then see business stabilize or improve in 2010.”
Wyndham’s shares continue to plummet from their 52-week high of $24 in May 2008.
The company also reported a quarterly net loss of $1.36 billion, compared with a year-earlier profit of $104 million, due to the downturn which hit timeshare properties particularly hard. Revenue per available room (revPAR) was down 6.4% in the quarter.
However the results were marginally ahead of market expectations, but the hotel group warned of difficult times ahead.

The company said: “Given the disruptions in the global economy and capital markets, and uncertainty about how these will impact employment, consumer spending and other macroeconomic drivers, guidance related to Wyndham Worldwide’s 2009 performance is subject to higher-than-normal levels of uncertainty.”