04:07 PM EDT, 10/04/2024 (MT Newswires) -- (Adds new information throughout, including legal arguments from Tempur Sealy's ( TPX ) complaint filed against the FTC and an agency spokeswoman declining comment about the case).

Tempur Sealy International ( TPX ) wants a federal court in Texas to block administrative proceedings and a legal challenge by the Federal Trade Commission seeking to derail its proposed $4 billion acquisition of rival Mattress Firm Group, the retailer said Friday.

Tempur Sealy ( TPX ) announced a deal in May 2023 to acquire Mattress Firm in exchange for $2.7 billion in cash and 34.2 million of its common shares, which at the time were worth $1.3 billion. The companies currently anticipate closing their merger by Feb. 9, although they would first need to clear several hurdles, including overturning a temporary restraining order issued in July by the US District Court for the Southern District of Texas while it considers the FTC arguments in the case.

In its complaint filed Friday in federal court in Houston, Tempur Sealy ( TPX ) argues the FTC has created a process that begins with its commissioners deciding whether to challenge a particular business combination, which is then adjudicated by an administrative law judge assigned from its staff. Companies can appeal negative rulings, although as Tempur Sealy ( TPX ) asserts, those decisions are reviewed by "the same five commissioners who voted to challenge the plaintiff's merger in the first place," later adding, "unsurprisingly, the FTC almost always wins."

The complaint also contends the FTC has "unfettered discretion" to decide whether to fight deals in-house, argue them in federal court, or sometimes, in both jurisdictions.

The sides are next scheduled to appear on Nov. 12 in court to hear the FTC's request for a temporary injunction blocking the proposed merger. Those hearings are expected to last about two weeks, Tempur Sealy ( TPX ) said on Friday. The FTC also has an evidentiary hearing planned for Dec. 4, although the companies are asking the agency to continue its review until February when they expect the federal court will have decided on the temporary injunction.

Contacted by MT Newswires on Friday, an FTC spokeswoman said the agency had no comment on the Tempur Sealy ( TPX ) complaint.

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