Wyndham Chairman Holmes states a protracted review process
creates uncertain outcome and no guarantee of closing.
Wyndham Hotels & Resorts has confirmed receipt of a
40-page and 65-topic 'Second Request' from the Federal Trade Commission in
connection with Choice Hotels International unsolicited proposed acquisition of
Wyndham.
“From the beginning, Wyndham has consistently stated that
this transaction would be subject to an FTC Second Request, and therefore the
FTC's decision to issue one is no surprise,” said Wyndham Chairman Stephen
Holmes. “Choice, on the other hand, continues to ignore the significant risk
this poses to our shareholders, and mischaracterize how the FTC will define the
relevant market. The protracted review process – with an unpredictable timeline
and outcome – would substantially reduce the value of Choice’s offer and
disrupt Wyndham's business.”
Holmes continued, “The Second Request, which is issued in
only around 1% of deals reviewed by the FTC, marks the start of a complex,
lengthy process as both parties provide the FTC with the terabytes of data and
documents it has requested, with an uncertain outcome and no guarantee of
closing. Despite the distraction, the Board and management team will continue
to execute Wyndham's standalone strategy with a focus on providing shareholders
with long-term, sustainable value.”
In response to Wyndham's new comments, a Choice Hotels spokesperson told Hotel Investment Today, “Choice remains confident that
we can complete the combination within a one-year customary timeframe. Choice
continues to progress through the regulatory process with the FTC, and as expected, we received a Second Request for
additional information from the FTC. This part of the regulatory review process
is not uncommon, and we expect to continue to work cooperatively with the FTC.
We remain confident in the value a Choice-Wyndham combination will create for
franchisees and guests.”
Wyndham said it will comply fully with the FTC’s request,
which will have the effect of extending the 30-day waiting period imposed by
the Hart-Scott-Rodino Antitrust Improvements Act of 1976.