NORTH BETHESDA, Maryland—Selection Lodges Worldwide, Inc. issued an investor presentation and infographic disputing the claims made by Wyndham Lodges & Resorts, Inc. in reference to Selection’s proposal to purchase Wyndham. The presentation has been filed with the U.S. Securities and Change Fee.
Patrick Pacious, president and CEO of Selection Lodges, mentioned, “We’re upset Wyndham is pushing this disinformation marketing campaign. Their tackle the antitrust threat on our proposed mixture is deceptive and additional displays the board’s obvious entrenchment. Wyndham’s characterization of the lodging trade’s aggressive panorama and related regulatory standards is wrong. Our pro-competitive mixture is properly positioned to acquire approval, and we stay dedicated to finishing it for the advantage of each firms’ franchisees, shareholders, and visitors.”
The presentation contains:
- Wyndham is hinging its argument on a model of the lodging trade: Wyndham segments lodges based mostly on STR chain scales, however STR chain scales aren’t significant underneath antitrust regulation. Wyndham overlooks that Selection and Wyndham account for under 10 p.c of U.S. room income. There’s competitors between lodge manufacturers for visitors and franchisees and present manufacturers often transfer up and down STR chain scales. Wyndham didn’t embrace impartial lodges, which comprise roughly 45 p.c of the market. Wyndham’s definition of the market is contradicted by authorized and regulatory precedent and has already been rejected by antitrust enforcers of their approval of the Marriott-Starwood mixture.
- Wyndham’s constrained market definition contains 9 different main rivals, together with Marriott, Hilton, and IHG. Whereas Wyndham implies that even the largest lodge firms could be unable to compete with the mixed firm for franchisees, these firms’ manufacturers are competing.
- Combining Selection and Wyndham would assist franchisees scale back prices, enhance profitability, and counteract market gamers and OTAs. By combining the 2 firms, franchisees may very well be positioned to compete towards bigger lodge model rivals. They might additionally compete with main OTAs, which at the moment account for greater than half of on-line lodge bookings and have a advertising spend that’s 10 occasions bigger than Selection and Wyndham mixed.
- Mixture may present visitors with expanded lodging choices and an enhanced rewards program. The mixed firm would supply a fulsome suite of taking part properties throughout lodge sorts and places. This mixture may additionally broaden advantages and rewards for visitors by creating an enhanced rewards program. A Selection-Wyndham mixture wouldn’t change competitors for visitors as a result of franchisees would proceed to manage pricing.
- Selection is continuing alongside the anticipated path of regulatory assessment. Selection is making progress on the regulatory course of with the U.S. Federal Commerce Fee (FTC). Selection expects to proceed cooperating with the FTC through the Second Request course of, which Selection expects to start on January 11.
Moelis & Firm LLC, Goldman Sachs & Co. LLC, and Wells Fargo are serving as monetary advisors to Selection and Willkie Farr & Gallagher LLP, and Axinn, Veltrop & Harkrider LLP are serving as authorized advisors.
