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

From the Filing

0001140361-24-001983.txt : 20240112 0001140361-24-001983.hdr.sgml : 20240112 20240111202045 ACCESSION NUMBER: 0001140361-24-001983 CONFORMED SUBMISSION TYPE: DEFA14A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20240112 DATE AS OF CHANGE: 20240111 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: 24530382 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 ny20016614x11_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 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. Independ