Choice Hotels International has submitted an investor presentation to the Securities and Exchange Commission (SEC), countering what it alleges are “false and misleading antitrust claims” made by Wyndham Hotels & Resorts. The presentation aims to address Wyndham’s objections to Choice’s unsolicited proposal to acquire the company.
Patrick Pacious, CEO of Choice Hotels, expressed disappointment with Wyndham’s approach, stating, “We are disappointed Wyndham is pushing this disinformation campaign. Their take on the antitrust risk on our proposed combination is misleading and further reflects the board’s apparent entrenchment.”
Pacious continued to assert that Wyndham’s characterization of the competitive landscape and regulatory criteria within the lodging industry is inaccurate. He defended Choice’s proposed acquisition as pro-competitive, well-positioned for approval, and emphasized their commitment to completing the deal for the benefit of both companies’ franchisees, shareholders, and guests.
The ongoing dispute escalated after representatives from Wyndham reportedly initiated discussions with Choice regarding “a potential transaction and regulatory protections.” However, these talks came to an abrupt halt on December 17, leaving both parties at an impasse.
Read more: Wyndham Settles Web Search Antitrust Suit
Choice’s investor presentation accuses Wyndham of misrepresenting competition in the hotel sector by relying on the segmentation of brands by STR1 chain scales, a measure of hotel demand. Choice Hotels refutes the significance of STR1 chain scales under antitrust law, arguing that the market share of Choice and Wyndham combined only represents 10% of US room revenue.
The presentation asserts that Wyndham’s definition of the market is overly narrow and contradicts legal and regulatory precedents. Choice pointed to antitrust enforcers’ approval of the Marriott-Starwood combination as evidence that Wyndham’s approach has been previously rejected.
Source: Pro Active Investors
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