Hilton Grand Vacations Might Experience a Bidding War


Apollo made an offer for HGV, will Blackstone follow?

Hilton Grand Vacations may soon experience a bidding war from two private equity titans.

Apollo Management has reportedly made an offer for the Orlando0based timeshare company. Early reports suggest a price of $40 per share. Its competitor Blackstone may also make an offer for the company.

No public disclosures have hit the market. However, sources close to the potential bidders have said that the bidding is underway, according to Bloomberg News. Activist investor Paul Singer accumulated a position in the stock recently in his hedge fund Elliot Management. He has pushed for a sale of the company.

We reported in August that the firm was considering strategic options. At the time, Apollo had reportedly made a private offer. However, that bid wasn’t confirmed until Monday.

About Hilton Grand Vacations

The company owns 54 resorts comprising 8,888 units. Furthermore, these assets are located in the Hawaiian Islands, New York City, Orlando, Washington D.C., and Las Vegas; and Europe.

The company cut its revenues and profit outlook back in August. That downward revision weighed on the shares. However, rumors of a sale of the company and activist pressure have pressed it higher in recent weeks.

Meanwhile, Apollo is very familiar with the Time-Share business. The private equity giant bought Diamond International in 2016. Diamond is a Las Vegas-based Time-Share company that owns 79 vacation destinations in 35 countries around the world. Adding the two portfolios together would make the new entity a force in the industry.

Finally, Time-Share sales can be cyclical and may well operate better without the pressure of the quarterly reporting duties of being a public company. Furthermore, the cost saving of two combined Time-Share firms would make Hilton Grand vacations a perfect target for a private equity buyout.

[Related: Can Apollo Get a Win with ADT after Canadian Services Sale]

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