Land & Structures Thinks Hilton Grand Vacations’ Proposed Acquisition of Diamond Resorts Would Overpay for the Enterprise, Cede Command to Apollo and Dilute Shareholders

Land & Structures Sends Letter to HGV Shareholders and Releases Presentation Outlining Major Concerns with the Proposed Acquisition

Highlights the Company’s Recent Misleading Statements About the Deal

Believes HGV is Additional Useful on a Standalone Foundation and Intends to Vote Versus Proposed Transaction

Currently Land & Structures Expenditure Administration LLC (collectively with its affiliates, “Land & Buildings”), a shareholder of Hilton Grand Vacations Inc. (“HGV” or the “Enterprise) (NYSE: HGV), sent an open up letter notifying HGV shareholders it intends to vote towards the Company’s proposed acquisition of Diamond Resorts International, Inc. (“Diamond”) from Apollo World Administration, Inc. (“Apollo”).

Land & Properties today also released a presentation outlining its critical concerns with the proposed deal, which can be identified listed here.

Beforehand, on April 20, 2021 Land & Structures sent a non-public letter to HGV’s Board of Directors (the “Board”), which can be uncovered in this article.

The full letter to shareholders follows:

Dear Fellow Hilton Grand Holiday Shareholders:

We are deeply concerned that Hilton Grand Vacations’ proposed acquisition of Diamond Resorts is not in the finest passions of all shareholders. We consider the proposed transaction quantities to a transfer of control to Apollo and HGV management with out payment of an acceptable command premium. As a consequence, we intend to vote in opposition to the transaction.

We imagine HGV is a lot more useful on a stand-alone foundation. As just lately as past year, the Board evidently agreed, stating in its proxy, “…it would be in the best curiosity of HGV’s stockholders to stay a standalone company…” 1

Our principal fears pertaining to the proposed acquisition are as follows:

  • HGV is overpaying for Diamond Resorts at 10x 2019 EBITDA, which is a lower finish unbranded time share business enterprise that is commonly acknowledged to warrant a decreased valuation than the branded companies of Hilton and Marriott. This reality was noted by Bank of The united states in its fairness opinion 2

  • HGV’s advancement profile is materially impaired with Diamond, as HGV’s standalone EBITDA is poised to expand 16% annually between 2022-2025, nicely ahead of Diamond’s 4% progress, as outlined in the proxy 3

  • HGV is diluting existing shareholders by growing its share base by one particular third at $40.55, a steep discount to good price of $55 when implementing the Marriott Family vacation multiple to HGV’s 2022 EBITDA forecast. 4

The comprehensive presentation discusses just about every of these factors and highlights our severe concerns with the proposed acquisition.

In the beginning we sought to express these considerations to HGV’s Board privately by delivering a letter to the Board on April 20, 2021. We had been really unhappy with the Board’s selection to publicly disclose our private letter and challenge a 13-website page presentation all through our extended-scheduled simply call with management last Friday, April 30, 2021. We consider this demonstrates the Board’s willingness to disregard the sights of its shareholders and further more solidifies our belief that the proposed acquisition is not in the finest passions of shareholders.

We believe that HGV should really stay a standalone corporation and that the proposed offer is not the ideal path forward for the Company. For these good reasons, we intend to vote towards the proposed acquisition.


Jonathan Litt

Founder & CIO
Land & Structures Financial investment Management, LLC

1 See HGV Agenda 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 assertion. HGV EBITDA centered on HGV management’s forecasts and Diamond EBITDA centered on HGV management’s adjustments to Diamond management’s forecasts.
4 See HGV preliminary proxy statement submitted with the SEC on April 15, 2021. Share value signifies cost used in proxy assertion of March 5, 2021. HGV standalone value primarily based on VAC’s EBITDA several disclosed in proxy statement and HGV management’s 2022 EBITDA projection.

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Dan Zacchei / Joe Germani
Sloane & Business
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