Analysts Skeptical of Choice Hotels Acquisition Interest in Wyndham

Some analysts aren't buying the idea that Choice Hotels International is seriously contemplating an acquisition bid for Wyndham Hotels & Resorts, which The Wall Street Journal reported sources saying was a possibility on Tuesday.

"Somebody's just thinking out loud," wrote David Katz at Jefferies' equity research in a report.

Spokespeople for both hotel companies said they wouldn't comment on "rumors." A merger could create the largest hotel franchisor in the U.S. with brands including Comfort, Days Inn, and Super 8.

The share price of Choice Hotels dropped nearly 5 percent on Tuesday after the report. Poor investor response to the potential deal was matched by wariness and skepticism from research analysts at investment banks.

Katz estimated that a deal would require Choice Hotels to pay a 30 pe