Bluegreen Vacations saw a significant increase in its stock as Hilton Grand Vacations announced its plans to acquire the smaller timeshare operator. The deal, valued at $1.5 billion, includes both cash and debt.
Bluegreen's stock surged by an impressive 106% to reach $73.10 during premarket trading. This substantial gain adds to the 42% increase the company had already experienced this year.
However, Hilton Grand Vacations was not as fortunate, as its shares slipped by approximately 6%. This decline further extended the company's year-to-date decrease of about 3%.
The Deal Details
Hilton Grand Vacations agreed to purchase Bluegreen for $75 per share in cash. Bluegreen currently has over 200,000 customers who hold vacation-ownership interests at various resorts, including popular locations such as Orlando, Fla., Panama City Beach, and the Smoky Mountains.
Challenges in the Timeshare Industry
The timeshare industry has faced difficulties this year, primarily due to its reliance on domestic travelers. As international travel experienced a surge this summer, timeshare operators found themselves ill-prepared. Moreover, consumer concerns about discretionary spending and general financial health have also affected the sector.
This downturn is evident in Marriott Vacations Worldwide, a major player in the industry, which has seen its stock decline by nearly 39% this year.
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