There was a sharp jump in the share price of Bluegreen Vacations recently. The vacation property management company Hilton Grand Vacations put forward a $1.5 billion offer for the rival, which delighted investors. Immediately after the announcement of the takeover bid, the Bluegreens Vacations shares shot up by more than 100%.

Who is behind the buyer? Hilton Grand Vacations is a timeshare company that markets and sells vacation ownership, manages resorts in leisure and city destinations, and operates a points-based vacation club. The company operates its business through two segments: Property Sales & Financing and Resort Operations & Club Management.

The company has more than 60 properties in Orlando, Las Vegas, the Hawaiian Islands, New York City, Washington D.C., South Carolina, Barbados and Mexico. The Hilton Grand Vacations Club had a total of 526,000 members as of last year, who have the opportunity to exchange their ownership rights for stays at any Hilton Grand Vacations resort. Hilton generates the majority of its revenue in the Property Sales & Financing segment.

Hilton Grand Vacations pays high takeover premium According to the terms of the agreement, Bluegreen Vacations shareholders will receive $75 in cash for each share held. This is more than double the closing price of the shares before the takeover announcement. On a company value basis, the deal including liabilities has a volume of $1.5 billion.

Regional addition makes strategic sense According to the actors, the takeover offers a high strategic value: Hilton Grand Vacations CEO Mark Wang commented on the deal. „Bluegreen Vacations has a strong track record of proven organic growth, an engaged customer base of more than 200,000 members and has important strategic partnerships that will increase our reach and diversify our travel flow.

Like Hilton Grand, Bluegreen Vacations is also active in the area of vacation ownership. Through the acquisition, the number of members increases to more than 740,000 and the resort portfolio increases from 150 to almost 200 properties in 14 new regions and eight new states. Specifically, Hilton will expand its presence on the East Coast of the USA and gain a number of outdoor and ski destination resorts.

A size comparison: In 2022, Hilton Grand Vacation had a turnover of $3.83 billion and a net profit of $352 million. Blugreen Vacations reported sales of $817.7 million and a profit of $64.4 million for the same period.

Deal completion expected in first half of 2024 In addition to the regional addition, the parties involved expect high synergy effects. Within the first 24 months after the merger (note: according to Hilton Grand Vacations in the first half of 2024 expected), cost synergies of $100 million are expected to be achieved. Afterwards, additional revenue synergies of $75 to $100 million are targeted.

The Bluegreen Vacations investors seem to like the new development. Yesterday afternoon, the shares traded after the doubling of the share price at $73.2 and thus only slightly below the level of the purchase offer ($75).