11:55 AM EDT, 07/23/2024 (MT Newswires) -- Tempur Sealy International's ( TPX ) planned acquisition of Mattress Firm can close in late 2024 in a best case scenario, Wedbush Securities said Tuesday in a note after hosting a call for investors with John Newman, former deputy director of the Bureau of Competition at the Federal Trade Commission, to evaluate the FTC's case to block the acquisition.

Newman believes the preliminary injunction proceeding will likely decide the merger fate, the report said. The PI trial is set to begin on Nov. 14 and conclude proceedings before Thanksgiving followed by a likely early-to-mid-December ruling.

"Assuming no appeals, an ideal scenario allows for late 2024 resolution," the note said.

The FTC's core argument is that a merger between the industry's largest supplier and retailer would cause harm to other mattress suppliers, resulting in higher mattresses prices and fewer domestic bedding manufacturing jobs, the report said.

Wedbush said Newman still sees a higher chance for Tempur to succeed even though the FTC has a strong case against the deal.

"Overall, while we do not see the case as a 'slam dunk' for TPX, we still see a greater than 50% probability that the deal is successful," the report said. Wedbush kept its outperform rating on the stock with a $55 price target.

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