Hilton Grand acquiring Bluegreen Vacations in $1.5B deal

Two timeshare companies are joining forces in a billion-dollar merger.

Hilton Grand Vacations is acquiring Bluegreen Vacations in a $1.5 billion deal, Reuters reported. Shareholders of Bluegreen will receive $75 per share, a premium representing double the stock’s closing price at the end of last week.

The transaction values Bluegreen at $1.28 billion; the total price point considers debt.  Bloomberg reported Truist Financial Corp. analysts noted the customer acquisition cost was lower for Hilton Grand acquiring Bluegreen than the other way around due to Hilton’s name recognition.

The deal will raise Hilton Grand’s membership from 525,000 to more than 740,000. Its resort portfolio, meanwhile, will rise from approximately 150 properties to nearly 200, particularly expanding the company’s East Coast presence and its outdoor and ski destinations.

Hilton Grand is banking on a surge in domestic travel and vacations as pandemic-related concerns continue to wane, even as inflation threatens such trips.

The deal is expected to close in the first half of next year. Shares of Bluegreen more than doubled in early morning trading on Monday, while shares of Hilton Grand fell 8.7 percent.

Hilton Grand recently slashed its adjustable core earnings forecast for the year from $1.09 billion to $1.12 billion down to $1 billion to $1.02 billion.

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Hilton Grand spun off of its better-known namesake in 2017. Its vacation ownership interests include locations in Charleston, South Carolina and Las Vegas. The Orlando-based company this year bought 111 hotel rooms at 12 East 48th Street in Midtown Manhattan for $136 million, or $1.2 million per unit.

On Monday, Hilton Grand also announced a 10-year exclusive marketing agreement with Bass Pro Shops; the retailer has a longstanding relationship with Bluegreen, the official vacation partner of the company, and even worked on four outdoor-themed resorts through a joint venture.

— Holden Walter-Warner