Hilton Grand buys Bluegreen Vacations in $1.5 billion deal

Nov 6 (Reuters) – Vacation property company Hilton Grand Vacations (HGV.N) said on Monday it would buy peer BlueGreen Vacations (BVH.N) in a $1.5 billion deal that includes debt, to attract younger customers to timeshare properties. Expanding offers. .

Under the terms of the deal, Bluegreen Vacations shareholders will receive $75 in cash for each share owned, more than double the stock’s closing price on Friday, valuing the company at $1.28 billion.

High inflation began to affect domestic travel in the United States, after demand rose when coronavirus-related lockdowns were lifted.

“Our board of directors voted unanimously to approve this transaction,” Hilton Grand Vacations CEO Mark Wang told Reuters in an interview. “Bluegreen is really the last of what we would call a high-quality strategic opportunity in our space.”

Both Hilton Grand and Bluegreen Vacations market and sell timeshares, or vacation ownership interests — a model in which multiple owners have exclusive use of the property for a period of time.

Shares of Bluegreen Vacations rose 110% to close at $73.45 on Monday, while Hilton Grand stock closed down 8% at $34.25.

Hilton Grand Vacations said 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.

Nearly 75% of Bluegreen Vacations’ customer owners are Generation X, and many are in their 40s to 50s, or younger, Wang said.

“We are excited that we will be able to track an aggressive customer at an early stage in their life,” he said.

It will also expand Hilton’s presence along the East Coast of the United States with the addition of a number of outdoor and ski destinations.

Hilton Grand, which went public in 2017, said it had signed a 10-year exclusive marketing agreement with outdoor retailer Bass Pro Shops.

“One of the key challenges for an independent vacation rental company like BVH is that it does not have a well-recognized brand like HGV (Hilton), so the cost of customer acquisition is much higher,” Truist Securities analysts said in a note.

Separately, the company lowered its 2023 adjusted core earnings forecast to between $1 billion and $1.02 billion, from a previous forecast of $1.09 billion to $1.12 billion.

Credit Suisse Securities and Wells Fargo are acting as financial advisors to Bluegreen Vacations, and BofA Securities is acting as exclusive financial advisor to Hilton Grand Vacations.

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