In a bid to address growing concerns surrounding its proposed acquisition of Wyndham Hotels & Resorts, Choice Hotels International has taken a proactive stance by releasing a comprehensive investor presentation.
The move comes in response to what Choice perceives as a disinformation campaign initiated by Wyndham, attempting to raise antitrust alarms.
Disputing misleading claims
Choice's president and CEO, Patrick Pacious, expressed disappointment in Wyndham's campaign.
"We are disappointed Wyndham is pushing this disinformation campaign. Their take on the antitrust risk of our proposed combination is misleading and further reflects the board's apparent entrenchment. Wyndham's characterisation of the lodging industry's competitive landscape and relevant regulatory criteria is incorrect. Our pro-competitive combination is well-positioned to obtain approval, and we remain committed to completing it for the benefit of both companies' franchisees, shareholders and guests."
The presentation challenges Wyndham's antitrust claims, emphasising the pro-competitive, pro-franchisee and pro-guest nature of the proposed combination.
Choice countered Wyndham's market segmentation tactics, highlighting that both companies only account for 10% of US room revenue and stressed the intense competition within the lodging industry.
The road to regulatory approval
The presentation emphasises Choice's commitment to regulatory compliance and claims that the company is proceeding as expected in the regulatory review process with the US Federal Trade Commission (FTC).
Despite Wyndham's non-engagement, Choice is set to commence the Second Request process on 11 January 2024 and has expressed confidence in completing the combination within a customary one-year timeframe.
Claimed benefits for franchisees and guests
Choice Hotels underscored the claimed strategic benefits of the proposed combination, asserting that it would empower franchisees to reduce costs and improve profitability.
It emphasised the potential for the combined entity to counteract dominant market players and online travel agencies.
It also outlined the benefits for guests, including an expanded lodging options suite and an enhanced rewards programme, positioning the combined company as a formidable force in the competitive landscape.
Moelis & Company LLC, Goldman Sachs & Co LLC, Wells Fargo, Willkie Farr & Gallagher LLP and Axinn, Veltrop & Harkrider LLP have been enlisted as financial and legal advisors.
