Wyndham Board Cites Antitrust Risk in Choice Hostile Bid

TL;DR

**Wyndham's Board is pushing back hard on Choice's hostile bid, citing major antitrust risks for shareholders.**

AI Summary

Wyndham Hotels & Resorts, Inc. (NYSE: WH) filed a DEFA14A on January 4, 2024, to inform investors about its ongoing concerns regarding an unsolicited takeover approach from Choice Hotels. Wyndham's Board of Directors is worried that its stockholders would not be fairly compensated for the significant and uncertain antitrust risks associated with an extended regulatory review. This matters to investors because it highlights the Board's commitment to protecting shareholder value against a potentially risky acquisition, suggesting a prolonged battle or a need for Choice to sweeten its offer.

Why It Matters

This filing signals Wyndham's strong resistance to Choice's unsolicited offer, primarily due to antitrust concerns, which could lead to a protracted legal battle or a revised, potentially higher, offer from Choice.

Risk Assessment

Risk Level: high — The filing explicitly mentions 'asymmetrical risk' and 'uncertain outcome' due to an 'extended antitrust review,' indicating significant regulatory hurdles and potential for a deal to fall apart.

Analyst Insight

Investors should monitor further communications from both Wyndham and Choice, particularly regarding any revised offers or antitrust concessions, as the current filing indicates a strong likelihood of a protracted and potentially unsuccessful takeover attempt under current terms.

Key Players & Entities

• Wyndham Hotels & Resorts, Inc. (company) — the registrant and target of an unsolicited approach
• Choice (company) — the company making an unsolicited approach and hostile exchange offer
• Wyndham Board of Directors (person) — expressed concerns about antitrust risks and retained counsel
• April 2023 (date) — when Choice's unsolicited approach began
• January 4, 2024 (date) — date of the DEFA14A filing

Forward-Looking Statements

• Choice Hotels will need to significantly increase its offer or provide substantial antitrust protection to acquire Wyndham. (Choice Hotels) — medium confidence, target: Q2 2024
• The acquisition process will be prolonged due to regulatory scrutiny and Wyndham's resistance. (Wyndham Hotels & Resorts, Inc.) — high confidence, target: Q4 2024

FAQ

From the Filing

0001140361-24-000729.txt : 20240104 0001140361-24-000729.hdr.sgml : 20240104 20240104171519 ACCESSION NUMBER: 0001140361-24-000729 CONFORMED SUBMISSION TYPE: DEFA14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20240104 DATE AS OF CHANGE: 20240104 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WYNDHAM HOTELS & RESORTS, INC. CENTRAL INDEX KEY: 0001722684 STANDARD INDUSTRIAL CLASSIFICATION: HOTELS & MOTELS [7011] ORGANIZATION NAME: 05 Real Estate & Construction IRS NUMBER: 823356232 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEFA14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-38432 FILM NUMBER: 24513248 BUSINESS ADDRESS: STREET 1: 22 SYLVAN WAY CITY: PARSIPPANY STATE: NJ ZIP: 07054 BUSINESS PHONE: 973-753-7791 MAIL ADDRESS: STREET 1: 22 SYLVAN WAY CITY: PARSIPPANY STATE: NJ ZIP: 07054 DEFA14A 1 ny20016614x4_defa14a.htm DEFA14A 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 4, 2024, Wyndham Hotels & Resorts, Inc. made the following materials available to investors. THE REAL ANTITRUST STORY Since Choice’s unsolicited approach in April 2023, the Wyndham Board of Directors consistently has expressed concerns that Wyndham stockholders would not be adequately compensated for the asymmetrical risk an extended antitrust review with an uncertain outcome would cause.  Choice, for its part, has been consistently dismissive of these concerns and unwilling to offer adequate protections and compensation for these risks. Taking its responsibilities seriously, the Wyndham Board  retained outside regulatory counsel and an economist enabling it to both understand the nature of the issues and the magnitude of the significant risks. These conclusions were shared early in the process with Choice.  Yet Choice and its advisors minimized the regulatory issues throughout the entire period of discussion with Wyndham. Following Choice’s unilateral decision to launch a hostile exchange offer, Wyndham was required under SEC rules to provide a public response and recommendation to its shareholders, including addressing antitrust issues directly and transparently. The Wyndham Board’s assessment was and continues to be affected by a number of recent and evolving developments including: • The broader regulatory context of unprecedented antitrust enforcement, including the publication of the final 2023 Merger Guidelines that treat combined market shares of over 30% as presumptively illegal;   • The FTC’s initiation of a detailed investigation of the potential combination following Choice’s October 17 public disclosure of its unsolicited approach before there was an exchange offer or transaction to evaluate (a very unusual move signaling significant interest in the transaction);   • Strong public opposition from Wyndham’s franchisees who are at the core of our business model.  Indeed, the majority of our owners, who are members of the Asian American Hotel Owners Association ( AAHOA ), have expressed vehement opposition to the deal. After Choice launched its hostile bid, AAHOA fielded and publi