Vacation property operator Hilton Grand Vacations said it would buy peer Bluegreen Vacations in a $1.5 billion deal including debt, to attract younger customers for its timeshare properties and expand offerings.
Under the deal terms, shareholders of Bluegreen Vacations will receive $75 in cash for each share held, more than double the stock’s closing price on Friday, valuing the company at $1.28 billion.
High inflation has begun to weigh on domestic travel in the United States, following a surge in demand when COVID-related lockdowns were lifted.
“Our board voted unanimously for the approval of this deal,” Mark Wang, chief executive of Hilton Grand Vacations, told Reuters in an interview. “Bluegreen really is the last what we would call quality strategic opportunity in our space.”
Both Hilton Grand and Bluegreen Vacations market and sell timeshares, or vacation ownership interests – a model where multiple owners have exclusive use of a property for a period of time.
Shares of Bluegreen Vacations shot up 110% to close at $73.45 on Monday, while Hilton Grand stock closed 8% lower at $34.25.
The deal is expected to close during the first half of 2024 and will increase Hilton Grand’s membership base to more than 740,000, from more than 525,000, and its resort portfolio from 150 to nearly 200 properties, Hilton Grand Vacations said.
Approximately 75% of Bluegreen Vacations’ customer-owners are Generation X, many of which are in their 40s to 50s, or younger, said Wang.
Source: Reuters.com