Wyndham Confirms FTC Second Request for Choice's Hostile Bid

TL;DR

**FTC just hit Choice's Wyndham bid with a 'Second Request,' signaling major regulatory hurdles ahead.**

AI Summary

Wyndham Hotels & Resorts, Inc. (NYSE: WH) confirmed on January 11, 2024, that it received a 40-page, 65-topic 'Second Request' from the Federal Trade Commission (FTC) regarding Choice Hotels International, Inc.'s (NYSE: CHH) unsolicited acquisition offer. This extensive request indicates a prolonged regulatory review, which Wyndham's Chairman, Stephen P. Holmes, stated was expected, unlike Choice's apparent disregard for the significant risk this poses to Wyndham shareholders. This matters to investors because the extended regulatory scrutiny could delay or even derail the acquisition, impacting the potential premium shareholders might receive from the deal.

Why It Matters

The FTC's 'Second Request' signals a deep antitrust review, potentially delaying or blocking Choice Hotels' acquisition of Wyndham, which could affect Wyndham's stock price and future strategic direction.

Risk Assessment

Risk Level: high — The FTC's 'Second Request' indicates significant antitrust concerns, making the acquisition's approval uncertain and potentially leading to a lengthy, costly process or even abandonment.

Analyst Insight

Investors considering Wyndham stock for an acquisition premium should be cautious, as the FTC's 'Second Request' introduces significant uncertainty and potential delays, making the deal less likely to close quickly or on original terms. It would be prudent to assess the stock's value independent of the acquisition premium.

Key Numbers

• 9,100 — number of hotels (Wyndham's approximate hotel count globally)
• 95 — number of countries (number of countries where Wyndham operates)
• 40-page — length of FTC request (describes the extensiveness of the FTC's 'Second Request')
• 65-topic — number of topics in FTC request (describes the breadth of the FTC's 'Second Request')

Key Players & Entities

• Wyndham Hotels & Resorts, Inc. (company) — target of unsolicited acquisition offer
• Choice Hotels International, Inc. (company) — company making the unsolicited acquisition offer
• Federal Trade Commission (company) — regulatory body issuing the 'Second Request'
• Stephen P. Holmes (person) — Chairman of the Board of Wyndham Hotels & Resorts, Inc.
• January 11, 2024 (date) — date Wyndham confirmed receipt of the 'Second Request'

Forward-Looking Statements

• The acquisition of Wyndham by Choice Hotels will face significant delays due to the FTC's 'Second Request'. (Wyndham Hotels & Resorts, Inc.) — high confidence, target: Q3 2024
• There is an increased likelihood that the acquisition will either be abandoned or require substantial concessions from Choice Hotels. (Choice Hotels International, Inc.) — medium confidence, target: Q4 2024

FAQ

Filing Documents

• ny20016614x11_defa14a.htm (DEFA14A) — 22KB
• ny20016614x11_logo.jpg (GRAPHIC) — 153KB
• 0001140361-24-001983.txt ( ) — 233KB

From the Filing

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14A Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant Filed by a Party other than the Registrant Check the appropriate box: Preliminary Proxy Statement Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) Definitive Proxy Statement Definitive Additional Materials Soliciting Material under Sec.240.14a-12 Wyndham Hotels & Resorts, Inc. (Name of Registrant as Specified In Its Charter) (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check all boxes that apply): No fee required. Fee paid previously with preliminary materials. Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 On January 11, 2024, Wyndham Hotels & Resorts, Inc. issued the following press release. Wyndham Confirms Receipt of Expansive FTC Second Request Under HSR Act for Choice's Unsolicited Hostile Offer to Acquire Wyndham Extended Regulatory Review Certain Offer Continues to Undervalue Wyndham and Exposes Wyndham Shareholders to Significant Asymmetrical Risk PARSIPPANY, N.J., January 11, 2024 – Wyndham Hotels & Resorts (NYSE: WH) ("Wyndham" or the "Company"), the world's largest hotel franchising company with approximately 9,100 hotels spanning more than 95 countries, today confirmed receipt of a 40-page and 65-topic Second Request' from the Federal Trade Commission in connection with Choice Hotels International, Inc.'s (NYSE: CHH) ("Choice") 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 Stephen P. Holmes, Chairman of the Board. "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." Wyndham will comply fully with the FTC's Second Request as required by law. The effect of the Second Request is to extend the 30-day waiting period imposed by the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Independent third parties share Wyndham's concerns. View additional support at https://www.staywyndham.com/additional-support/. Advisors Deutsche Bank Securities Inc. and PJT Partners are serving as financial advisors and Kirkland & Ellis LLP and Arnold & Porter Kaye Scholer LLP are legal advisors to Wyndham. 1 About Wyndham Hotels & Resorts Wyndham Hotels & Resorts (NYSE: WH) is the world's largest hotel franchising company by the number of properties, with approximately 9,100 hotels across over 95 countries on six continents. Through its network of approximately 858,000 rooms appealing to the everyday traveler, Wyndham commands a leading presence in the economy and midscale segments of the lodging industry. The Company operates a portfolio of 24 hotel brands, including Super 8, Days Inn, Ramada, Microtel, La Quinta, Baymont, Wingate, AmericInn, Hawthorn Suites, Trademark Collection and Wyndham. The Company's award-winning Wyndham Rewards loyalty program offers approximately 105 million enrolled members the opportunity to redeem points at thousands of hotels, vacation club resorts and vacation rentals globally. For more information, visit www.wyndhamhotels.com. The Company may use its website as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Disclosures of this nature will be included on the Company's website in the Investors section, which can currently be accessed at https://investor.wyndhamhotels.com. Accordingly, investors should monitor this section of the Company's website in addition to following the Company's press releases, filings submitted with the Securities and Exchange Commission and any public conference calls or webcasts. Important Additional Information This press release is not an offer to purchase or a solicitation of an offer to sell any securities or the solicitation of any vote or approval. Wyndham Hotels & Resorts, Inc. ("Wyndham" or the "Company") has filed with the U.S. Securities and Exchange Commission (the "SEC") a solicitation/r

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