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Citing a lengthy regulatory review and lower valuation, Parsippany-based budget hotel operator Wyndham Hotel & Resorts is urging its shareholders to reject a takeover offer from rival hotel chain Choice Hotels International.

In a Dec. 18 press release, Wyndham’s board of directors said it determined the bid is not in the best interest of the company and its shareholders and that Choice has “failed to address the major value gap and risks of their offer.”

The communication comes about a week after Choice launched a hostile takeover bid for Wyndham, which, in recent months, has turned down several unsolicited buyout offers over concerns about regulatory approvals as well as the value of stock and the amount of debt.

Under the terms of the Dec. 12 proposal – which are the same as Choice’s most recent bid from October – Wyndham shareholders would receive the chance to choose all cash, all shares or a combination of the two. The offer puts the value of the deal for Wyndham – the larger of the two chains – at about $8 billion.

Stephen Holmes, Wyndham’s board chairman, commented, “The core issues we have articulated remain the same: a likely prolonged regulatory review period of up to 24 months with an uncertain outcome; the pure inadequacy of the Offer from a valuation standpoint, including the significant equity component of Choice stock; and the lack of consideration for Wyndham’s superior, standalone growth prospects.”

“Our Board has made itself consistently clear on these risks, but Choice continues to ignore what is in the best interests of Wyndham shareholders by repeatedly proposing illusory and unrealistic offers while making inconsistent and misleading public statements,” he stated.

“We are confident Wyndham can deliver long-term shareholder value well in excess of the $85 per share offered by Choice by continuing to execute on our existing business plan,” said Holmes, who added that the board is also recommending shareholders not tender their shares into the offer.

Wyndham also noted that reception within the budget hotel space has been extremely negative.

A recent survey by the Asian American Hotel Owners Association – the largest hotel owners association in the U.S. – found that 80% of Wyndham franchisees believe a megamerger would harm their business, while around 60% said they would terminate their contract in the event of a tie-up if they had the option, according to Wyndham.

Considered the world’s largest hotel franchising company, Wyndham has 9,000 hotels across 95 countries on six continents. Its portfolio of 23 brands includes AmericInn, Super 8, Days Inn, La Quinta, Hawthorn Suites, Trademark Collection and Wyndham.

Choice Hotels – whose 7,500 hotel footprint includes chains including Econo Lodge, Quality Inn and Clarion – has turned to acquisitions in recent years amid challenges when it comes to unit growth.

According to Choice, a merger with Wyndham could help the companies better compete for franchisees against larger industry players, like Marriott International and Hilton Worldwide Holdings Inc. — as well as generate $150 million in cost savings and “topline growth potential.”