A day after Choice Hotels International publicly disputed what it described as “false and misleading antitrust claims” made by Wyndham Hotels & Resorts to the U.S. Securities and Exchange Commission, Wyndham confirmed receipt of a 40-page and 65-topic "second request" from the Federal Trade Commission in connection with Choice’s unsolicited proposed acquisition of the company.
“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," Stephen P. Holmes, chairman of the board, said in a statement. "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.
“The Second Request, which is issued in only around 1 percent 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,” Holmes continued. “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 its statement, Wyndham said it 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.
Follow the Choice/Wyndham news here.