In a dramatic turn of events, Choice Hotels International Inc. has abandoned its aggressive pursuit of Wyndham Hotels & Resorts, a move welcomed by the Federal Trade Commission (FTC) as a victory for competition.
A Battle of Titans Unravels
Choice’s decision to withdraw its slate of nominees for Wyndham’s board of directors and let its exchange offer lapse comes after a contentious public dispute over the acquisition target’s resistance to the takeover bid. The FTC’s Bureau of Competition Director, Henry Liu, expressed satisfaction with Choice’s retreat, emphasizing the serious competition concerns raised by the proposed deal.
FTC Welcomes Choice Hotels Dropping Wyndham Hostile Buy : FTC Weighs In
Henry Liu, speaking on behalf of the FTC, highlighted the regulatory body’s scrutiny of Choice’s tender offer and its attempt to stack Wyndham’s board with its own nominees. Liu emphasized that such maneuvers posed significant competition questions and applauded their abandonment as a win for consumers. Assuring continued vigilance, he asserted the agency’s commitment to ensuring fair competition in the hotel industry.
Antitrust Implications and Financial Dynamics
Central to the dispute were the antitrust implications of the proposed merger. While Choice downplayed concerns, Wyndham foresaw intense FTC scrutiny and a probable legal challenge. Wyndham’s resistance was also fueled by concerns over the adequacy of Choice’s offering price, which it deemed insufficient considering potential regulatory hurdles. Choice’s bid in October, valuing Wyndham at $7.8 billion, failed to sway Wyndham’s board.
FTC Welcomes Choice Hotels Dropping Wyndham Hostile Buy : Legal Counsel and Strategic Moves
Choice Hotels enlisted the legal expertise of Willkie Farr & Gallagher LLP, with Axinn Veltrop & Harkrider LLP advising on antitrust matters. On the other side, Wyndham sought counsel from Kirkland & Ellis LLP and Arnold & Porter Kaye Scholer LLP. The legal teams engaged in strategic maneuvers throughout the battle, navigating complex regulatory and financial landscapes.
