Land & Buildings Believes Hilton Grand Vacations’ Proposed Acquisition of Diamond Resorts Would Overpay for the Corporation, Cede Manage to Apollo and Dilute Shareholders
STAMFORD, Conn.–(Small business WIRE)–Today Land & Buildings Financial investment Administration LLC (alongside one another with its affiliate marketers, “Land & Buildings”), a shareholder of Hilton Grand Vacations Inc. (“HGV” or the “Corporation) (NYSE: HGV), sent an open up letter notifying HGV shareholders it intends to vote from the Company’s proposed acquisition of Diamond Resorts International, Inc. (“Diamond”) from Apollo International Administration, Inc. (“Apollo”).
Land & Structures right now also released a presentation outlining its major difficulties with the proposed offer, which can be observed here.
Previously, on April 20, 2021 Land & Properties despatched a personal letter to HGV’s Board of Administrators (the “Board”), which can be identified here.
The comprehensive letter to shareholders follows:
Expensive Fellow Hilton Grand Holiday Shareholders:
We are deeply concerned that Hilton Grand Vacations’ proposed acquisition of Diamond Resorts is not in the finest pursuits of all shareholders. We think the proposed transaction amounts to a transfer of handle to Apollo and HGV administration with out payment of an ideal control top quality. As a final result, we intend to vote in opposition to the transaction.
We believe that HGV is additional useful on a stand-by yourself foundation. As not long ago as past calendar year, the Board apparently agreed, stating in its proxy, “…it would be in the ideal interest of HGV’s stockholders to keep on being a standalone company…” 1
Our principal problems regarding the proposed acquisition are as follows:
- HGV is overpaying for Diamond Resorts at 10x 2019 EBITDA, which is a reduced close unbranded time share organization that is broadly acknowledged to warrant a reduce valuation than the branded corporations of Hilton and Marriott. This point was noted by Bank of The usa in its fairness opinion 2
- HGV is correctly ceding regulate to Apollo which will own 28% of the Corporation. The proposed acquisition will give Apollo the ideal to at least two Board seats and will lock in Apollo’s guidance for the Board and management by way of standstill and voting obligations
- HGV’s expansion profile is materially impaired with Diamond, as HGV’s standalone EBITDA is poised to develop 16% per year involving 2022-2025, properly ahead of Diamond’s 4% advancement, as outlined in the proxy 3
- HGV is diluting existing shareholders by expanding its share base by one third at $40.55, a steep lower price to reasonable value of $55 when applying the Marriott Holiday numerous to HGV’s 2022 EBITDA forecast. 4
The detailed presentation discusses each and every of these factors and highlights our really serious problems with the proposed acquisition.
To begin with we sought to specific these considerations to HGV’s Board privately by providing a letter to the Board on April 20, 2021. We have been extremely let down with the Board’s selection to publicly disclose our personal letter and situation a 13-web page presentation during our lengthy-scheduled contact with administration previous Friday, April 30, 2021. We feel this demonstrates the Board’s willingness to disregard the sights of its shareholders and more solidifies our belief that the proposed acquisition is not in the finest interests of shareholders.
We believe HGV should keep on being a standalone business and that the proposed deal is not the greatest route forward for the Organization. For these good reasons, we intend to vote in opposition to the proposed acquisition.
Sincerely,
Jonathan Litt
Founder & CIO
Land & Properties Financial commitment Administration, LLC
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1 See HGV Timetable 14A filed with the SEC on April 30, 2021.
2 See HGV preliminary proxy assertion filed with the SEC on April 15, 2021.
3 EBITDA forecasts disclosed in HGV preliminary proxy statement. HGV EBITDA based on HGV management’s forecasts and Diamond EBITDA based on HGV management’s adjustments to Diamond management’s forecasts.
4 See HGV preliminary proxy assertion filed with the SEC on April 15, 2021. Share cost represents value used in proxy assertion of March 5, 2021. HGV standalone value based mostly on VAC’s EBITDA a number of disclosed in proxy assertion and HGV management’s 2022 EBITDA projection.
