# VAC/ILG shareholder activism speculation [THREAD CLOSED]



## krj9999

Stirring the pot; will see whether anything happens.

GREENWICH, Conn., May 24, 2017 /PRNewswire/ -- FrontFour Capital Group LLC (together with its affiliates, "FrontFour"), a significant stockholder of ILG Inc. ("ILG" or the "Company") (NASDAQ: ILG), today announced it has delivered a letter to the Board of Directors of ILG calling upon the Company to seek a business combination with Marriott Vacations Worldwide Corporation ("Marriott Vacations"). FrontFour believes there is tremendous industrial logic for ILG and Marriott Vacations to merge and at a meaningful premium to the current stock price, the transaction would still be highly accretive financially while also yielding a number of qualitative synergies.

Couple excerpts from the letter on rationale for combining:
(v) The extinguishment of potential conflicts associated with Marriott's intention to combine the Marriott Rewards Program with Starwood's Preferred Guest Loyalty Program ("SPG") by the end of 2018;
(vi) The creation of a complementary and unparalleled product portfolio enhancing the value proposition to existing timeshare owners;


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## bizaro86

ILG can't really merge right now. When they were spun off from Star wood,  a reverse Morris trust structure was used. Essentially, no tax was paid on the transaction, but ILG can't sell itself or buy anything too big for awhile, or issue too many shares. If they do, the spin-off becomes taxable, and they have to pay the tax for Star wood (now part of Marriott International )

They got asked about it extensively on the last ILG conference call.


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## dioxide45

Here is full text of the letter and article.

I don't know the legalities behind the reverse Morris trust, but it was a tax free event to the old Starwood (whole company) shareholders. Wikipedia gives a good explantion of how it works.



> A Reverse Morris Trust is used when a parent company has a subsidiary (sub-company) that it wants to sell in a tax-efficient manner. The parent company completes a spin-off of a subsidiary to the parent company's shareholders. Under Internal Revenue Code section 355, this could be tax-free if certain criteria are met. The former subsidiary (now owned by the parent company's shareholders, but separate from the parent company) then merges with a target company to create a merged company. Under Internal Revenue Code section 368 (a)(1)(A), this could be largely tax-free if the former subsidiary is considered the "buyer" of the target company. The former subsidiary is the "buyer" if its shareholders (also the original parent company's shareholders) own more than 50% of the merged company. Thus, the former subsidiary will usually have a bigger market capitalization than the target company. The target company's managers rarely run the merged company.



It seems now to make sense why ILG was a good target company to buy Vistana. They were valued lower than Vistana. I thought it made sense for Marriott to have sought to acquire Vistana when they ended up going to ILG. Keeping what would have been all Marriott brands together in a combined timeshare entity. Marriott could have allowed crossover between the two companies properties through its exchange company using DC points and assigned DC points to each Vistana interval. It would have been a new crop of people they could earn pure profit enrollment fees from. Vistana owners could continue to use StarOptions within their system but if they wanted to go to a Marriott property, they would have used DC points.

It would seem though that Starwood selling Vistana to MVW wouldn't have been as advantageous since it wouldn't have been a tax free sale like when they sold to ILG.

I don't think a merger between MVW and ILG will happen. Having three premium timeshare brands under one company could raise the eyebrows of the Dept of Justice. I would certainly hope that they would at least look at any kind of merger as being suggested above. Having three (Hyatt, Marriott and Vistana) of the four (add Hilton) high end timeshare hotel brands in a combined ILG can't be good for the customer.


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## taffy19

If this would to happen?

FrontFour Calls Upon ILG Inc. to Seek Business Combination with Marriott Vacations Worldwide Corporation
By
Published: May 24, 2017 8:00 a.m. ET


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## taffy19

[*Do you read a threat in this letter?*]  [_Threads merged._]

Read last paragraph.

Good or bad for timeshare owners in general?  Did DRI timeshare owners fare well by their advice?

I know one thing that we will not spend one penny more in this racket because of the constant changes.


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## taffy19

Well, here is an example of how good this is for the DRI timeshare owners NOT!!! but it is for Wall Street investors.

Timeshare owners are enticed to do upgrades during a presentation and not all sales people are honest or explain enough so the consequences are understood but this person should have read his contract thoroughly and asked more questions if it wasn't all clear to him or have used his right to rescind the contract.  Legally, the company is off the hook.

I believe that it has to do with DRI taking over independent resorts and have the owners of these resort convert to the DRI point system but that seems to cause problems.  There are threads about it already about confusion what they ended up with but the fees go up a lot.  How can this continue?

Longterm growth by these companies is no longer valued but timeshare owners are only going to take so much abuse or keep on paying more for using the same product they already owned.  How are they going to integrate all these different systems without hurting one brand over the other?  It's going to be interesting to keep following the outcome.


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## WalnutBaron

Personally, I like good, healthy competition. This kind of merger would be anti-competitive.


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## taffy19

It was already discussed on the Marriott Forum last Wednesday.  I didn't realize that but it will be interesting to read what will happen at the end.

Healthy competition is best for the consumer like you wrote.


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## kds4

krj9999 said:


> Stirring the pot; will see whether anything happens.
> 
> GREENWICH, Conn., May 24, 2017 /PRNewswire/ -- FrontFour Capital Group LLC (together with its affiliates, "FrontFour"), a significant stockholder of ILG Inc. ("ILG" or the "Company") (NASDAQ: ILG), today announced it has delivered a letter to the Board of Directors of ILG calling upon the Company to seek a business combination with Marriott Vacations Worldwide Corporation ("Marriott Vacations"). FrontFour believes there is tremendous industrial logic for ILG and Marriott Vacations to merge and at a meaningful premium to the current stock price, the transaction would still be highly accretive financially while also yielding a number of qualitative synergies.
> 
> Couple excerpts from the letter on rationale for combining:
> (v) The extinguishment of potential conflicts associated with Marriott's intention to combine the Marriott Rewards Program with Starwood's Preferred Guest Loyalty Program ("SPG") by the end of 2018;
> (vi) The creation of a complementary and unparalleled product portfolio enhancing the value proposition to existing timeshare owners;



Interesting, but what stood out most to me was the language regarding opening up greater access to all of those with 'Corporate' paid II accounts versus individual paid memberships so II can pursue 'upselling' things like 'Gold' or 'Platinum' membership fees. I didn't realize that 4 out of every 10 II memberships are paid by Marriott, Hilton, etc. based on owning their respective points product.

_"ILG has approximately 40% corporate exchange members whose annual fees are paid by their respective timeshare operator from their annual dues.  This is lower margin, as ILG has less direct customer contact and therefore less of an ability to control the process and upsell.  Over the years, this corporate exchange portion has experienced headwinds due to industry consolidation as well as the larger timeshare operators trying to reduce the annual fees paid, so they can capture a larger spread.  Through the Vistana acquisition, ILG was able to bring approximately 25% of its corporate exchange members in-house, which effectively provides insulation against potential future headwinds.  A combination with Marriott Vacations, would significantly further increase in-house corporate exchange members, providing additional stability to this business."_


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## kds4

Definitely sounds like the 2% are saber-rattling (and by putting their letter into the press hoping to become the tail that wags the dog).


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## lizap

Don't have an opinion.


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## WBP

XXXXXX


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## sts1732

WalnutBaron said:


> Personally, I like good, healthy competition. This kind of merger would be anti-competitive.


I agree, it's seems sorta like a narrowing of the market, like the airlines.


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## krj9999

From Reuters today:

"ILG Inc (ILG.O), a U.S. provider of vacation timeshare properties, is holding early-stage talks about merging with another company after coming under pressure from activist shareholder FrontFour Capital Group, people familiar with the matter said.

The talks come as the timeshare industry seeks to improve its occupancy rates and shed its reputation of locking customers into complex contracts they do not understand, in the hope of becoming a more popular alternative for many U.S. holidaymakers.

ILG is working with investment bank Moelis & Co (MC.N) as it fields merger interest, the sources said. Marriott Vacations Worldwide Corp (VAC.N) and Hilton Grand Vacations Inc (HGV.N) are among the companies that have held talks with ILG, the sources added."


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## dioxide45

Here it the full article

http://www.reuters.com/article/us-ilg-inc-m-a-exclusive-idUSKBN1962RD


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## koppk01

[*Marriott Vacations should Buy Interval Leisure Group*] [_Threads merged._]
*
There is a rumor out that Marriott Vacations may buy Interval Leisure Group which includes both Vistana and the Hyatt timeshare group. As a Marriott Vacations owner I would be thrilled if that happens*


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## amycurl

I think that would be an interesting anti-trust situation.


Sent from my iPad using Tapatalk


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## RichardL

i suspect Marriott VC has nowhere near the money to bit off that amount.  Some of us recall when Marriott did in-deed own a piece of II, but it sold it off.
I believe that is why Interval originally gave a preference to Marriott and also why there has always been a Marriott Desk at II.  Just my opinion. As an
owner everytime Marriott shows growth and expansion I become more confident, after several years of merely cutting back.  New developments have
finally come.


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## SueDonJ

koppk01 said:


> *There is a rumor out that Marriott Vacations may buy Interval Leisure Group which includes both Vistana and the Hyatt timeshare group. As a Marriott Vacations owner I would be thrilled if that happens*



I think that's backwards.  The talk, which started at the end of May, is about ILG merging with VAC or HGVC.  This is the latest I've seen at seekingalpha.com: Timeshare merger talk lifts VAC, HGV, ILG

_[Merging threads.]_


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## dioxide45

amycurl said:


> I think that would be an interesting anti-trust situation.
> 
> 
> Sent from my iPad using Tapatalk


I would hope that the DOJ would at least look in to such a merger. Regardless if it is VAC or HGVC with ILG. Having three of the four major hotel timeshare brands under one corporate umbrella isn't a good thing for consumers.



RichardL said:


> i suspect Marriott VC has nowhere near the money to bit off that amount.  Some of us recall when Marriott did in-deed own a piece of II, but it sold it off.
> I believe that is why Interval originally gave a preference to Marriott and also why there has always been a Marriott Desk at II.  Just my opinion. As an
> owner everytime Marriott shows growth and expansion I become more confident, after several years of merely cutting back.  New developments have
> finally come.


VAC doesn't need cash to make this happen. When ILG bought Starwood's timeshare division (Vistana), the timeshare company was actually the larger company of the two. This is how ILG did the Reverse Morris Trust. In this arrangement, technically Vistana bought ILG in the merger.

In any regard, if such merger were to happen, ILG would simply issue new shares to the shareholders of VAC or HGVC based on the value of the company they are merging with. In the case of ILG's merger with Vistana, no cash was handed out, it was a 100% stock deal.


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## bizaro86

I think it is very likely ILG would be the acquiring party. If they are acquired, they will have to make a payment to Starwood (now Marriott International) for tax indemnification. If they acquire VAC, as long as they don't issue too much stock, no such payment would be required.


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## nuwermj

VAC has the lowest value of the three players (ILG, HGV, and VAC). Timeshare companies are trading about 10-11x adjusted EBITDA. ILG paid 12x for Vistana. DRI sold for 5.5x

Adjusted EBITDA 2016
ILG = $302 million
VAC = $261.4 million
HGV = $402 million

Adjusted EBITDA Outlook 2017
ILG = between $345 million and $365 million
VAC = between $276 million and $291 million
HGV = between $390 million and $415 million


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## pedro47

Anything is possible I can remember when the smaller shopping television channel QVC purchased the largest television shopping channel Cable Value Network (CVN).
Also, who would had dream that Amazon would purchased Whole Food Supermarket Company in 2017.


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## nuwermj

I agree pedro47. Closer to home, Diamond Resorts, which in 2007 was Polo Towers in Las Vegas, acquired the much larger Suntarra. The leveraged buyout is the technique that Diamond used.


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## GregT

nuwermj said:


> VAC has the lowest value of the three players (ILG, HGV, and VAC). Timeshare companies are trading about 10-11x adjusted EBITDA. ILG paid 12x for Vistana. DRI sold for 5.5x
> 
> Adjusted EBITDA 2016
> ILG = $302 million
> VAC = $261.4 million
> HGV = $402 million
> 
> Adjusted EBITDA Outlook 2017
> ILG = between $345 million and $365 million
> VAC = between $276 million and $291 million
> HGV = between $390 million and $415 million



I never realized that HGV had the highest EBITDA.  That's really interesting.   I still don't see a merger between any of these for quite awhile, but it is entertaining to track this.

Thanks for posting these!

Best,

Greg


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## BigMac

Look what's happened to the share price of VAC and ILG over the last year. Almost step by step. HGV not so much.




Also it looks like ILG has fewer "properties" than VAC but manages a whole bunch of second/third class timeshares,

*"As of the end of December, it had a total of 41 resorts within its Vistana Signature Experiences and Hyatt Vacation Ownership businesses, and managed about 250 resorts overall, while serving more than 2 million members through various membership and exchange programs".* While it would be great to get direct access to Hyatt, Sheraton and Westin properties, not sure how a merger which included the rest under ILG management would benefit us.


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## dioxide45

BigMac said:


> While it would be great to get direct access to Hyatt, Sheraton and Westin properties, not sure how a merger which included the rest under ILG management would benefit us.


I would agree. ILG seems to be running these programs completely separately. I think though because Westin and Sheraton are operated by a separate company than Hyatt on the hotel side, they really couldn't market them together. Though with the combined Marriott and Starwood hotel brands under Marriott International, it does open up the possibility that if ILG acquired VAC, they could somehow bring the two together under a single timeshare company.


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## nuwermj

BigMac said:


> Also it looks like ILG has fewer "properties" than VAC but manages a whole bunch of second/third class timeshares,
> 
> *"As of the end of December, it had a total of 41 resorts within its Vistana Signature Experiences and Hyatt Vacation Ownership businesses, and managed about 250 resorts overall, while serving more than 2 million members through various membership and exchange programs".* While it would be great to get direct access to Hyatt, Sheraton and Westin properties, not sure how a merger which included the rest under ILG management would benefit us.



ILG is more diversified than Marriott. In addition to running Interval International and Trading Places, they also have a siginficant rental business (Aqua-Aston) and resort management business (VRI). They are not the developer, only the manager, at the VRI resorts. Vacation Ownership is only about 60 percent of ILG's business.


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## BigMac

Looks like FrontFour is still pushing the ILG/MVC merger
https://www.bloomberg.com/news/arti...ce-activist-pressure-to-strike-deal-this-year


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## dioxide45

FourFront disclosed they own a 2% stake in ILG. Perhaps they need to disclose how much they own of VAC?


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## BigMac

dioxide45 said:


> FourFront disclosed they own a 2% stake in ILG. Perhaps they need to disclose how much they own of VAC?



Looks like they own almost 5% of ILG bot nothing of VAC
https://whalewisdom.com/filer/frontfour-capital-group-llc


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## dioxide45

BigMac said:


> Looks like they own almost 5% of ILG bot nothing of VAC
> https://whalewisdom.com/filer/frontfour-capital-group-llc


I think the 5% is the percentage that ILG makes up in their portfolio. According to the link in post #24, they own only 2% of ILG. At least it seems they aren't pushing ILG to buy VAC so they can somehow end up with a larger share of the merged company because they already own a bunch of VAC.


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## JIMinNC

dioxide45 said:


> I think the 5% is the percentage that ILG makes up in their portfolio. According to the link in post #24, they own only 2% of ILG. At least it seems they aren't pushing ILG to buy VAC so they can somehow end up with a larger share of the merged company because they already own a bunch of VAC.



My read is that FrontFour isn't pushing ILG to acquire MVW, but that the are pushing ILG to strike a deal to be acquired by MVW at a substantial premium to the current value of ILG stock


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## dioxide45

JIMinNC said:


> My read is that FrontFour isn't pushing ILG to acquire MVW, but that the are pushing ILG to strike a deal to be acquired by MVW at a substantial premium to the current value of ILG stock


Ahh, that makes more sense now.


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## Xpat

I noticed in the last MVW and ILG earning calls that analysts were quite interested into how both companies see their marketing rights to SPG/Marriott hotel guests and members now and in the future, when Marriott eventually combines Marriott Rewards and SPG.

I thought it was interesting that MVW sees its rights to the successor program to Marriott rewards as exclusive. If that is true, it might lock out ILG from marketing to the new program's membership base. Obviously, ILG doesn't see it that way and claims they have "ironclad" rights to market to the successor program used by Westin and Sheraton.

ILG's Craig Nash: "An important aspect of our licenses is access to the loyalty programs associated with each brand. Specifically, with respect to Westin and Sheraton, *it includes the rights to market the SPG, our agreements also give us ironclad rights to market to any successor or replacement program* used by the Westin and Sheraton hotel brands if Marriott decided to change the current loyalty plan structure."

MVW's Steve Weisz: "*we have exclusive rights to the Marriott reward members and to any successor program to Marriott rewards from a marketing perspective*. That means in terms of being able to make solicitations and marketing approaches to people not necessarily aligned with their hotel stay. In addition to that, we also talk to Marriott hotel guests as they stay in our Marriott hotels where we have linkage agreements. In a similar fashion, we're talking to guests that are staying in select Sheraton and Westin hotels. But we're not certainly marketing to the SPG marketing database to generate tours."​Maybe that's an additional incentive for ILG to look at ways to combine all or some of its businesses with MVW.

Now, while I do like the Marriott/SPG combination (lots of new places to stay at, especially internationally), I'm not really looking forward to a MVW/ILG tie up. Somehow I feel MVW's exclusive relationship with Marriott better preserves the value proposition of the MVC system. I guess we'll just have to wait and see.


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## dioxide45

It will be interesting to see how things play out when Marriott merges MR and SPG.


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## JIMinNC

Xpat said:


> Now, while I do like the Marriott/SPG combination (lots of new places to stay at, especially internationally), I'm not really looking forward to a MVW/ILG tie up. Somehow I feel MVW's exclusive relationship with Marriott better preserves the value proposition of the MVC system. I guess we'll just have to wait and see.



But, if Marriott Vacations Worldwide did acquire ILG, then one company would control all of the timeshare brands that correspond to the hotel brands owned by Marriott International. So, that seems like a simpler structure than the current situation where Marriott International licenses their brands to two different competing timeshare companies - MVW and ILG. The oddball with a merged MVW/ILG would be the Hyatt-branded timeshares (which have no connection to Marriott International-owned brands), but that could wind up being a chip to play as a potential divestiture to satisfy any anti-trust concerns in getting a merger approved by DOJ.


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## dioxide45

JIMinNC said:


> But, if Marriott Vacations Worldwide did acquire ILG, then one company would control all of the timeshare brands that correspond to the hotel brands owned by Marriott International. So, that seems like a simpler structure than the current situation where Marriott International licenses their brands to two different competing timeshare companies - MVW and ILG. The oddball with a merged MVW/ILG would be the Hyatt-branded timeshares (which have no connection to Marriott International-owned brands), but that could wind up being a chip to play as a potential divestiture to satisfy any anti-trust concerns in getting a merger approved by DOJ.


ILG could also divest itself of Vistana and just allow it to merge with MVW. That is probably less likely since the Starwood/Vistana and ILG merger was a tax free arrangement and divesting Vistana would complicate things and could get very expensive. I don't like the idea of three luxury hotel branded timeshares under one umbrella. It certainly wouldn't be good for the customer.


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## amycurl

Normally, I think there would be legitimate anti-trust concerns with an ILG/MVW merger. However, I don't think this DOJ would even bat an eyelash.


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## dioxide45

amycurl said:


> Normally, I think there would be legitimate anti-trust concerns with an ILG/MVW merger. However, I don't think this DOJ would even bat an eyelash.


They probably won't, unless we try to find ways to bring the issue to their attention.


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## Xpat

JIMinNC said:


> The oddball with a merged MVW/ILG would be the Hyatt-branded timeshares (which have no connection to Marriott International-owned brands), but that could wind up being a chip to play as a potential divestiture to satisfy any anti-trust concerns in getting a merger approved by DOJ.



I guess it would be convenient if Hyatt was acquired by Hilton, then HGVC could acquire the HRC portfolio and things would then be nicely aligned in the hotel/timeshare world.


Sent from my iPhone using Tapatalk


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## Xpat

dioxide45 said:


> I don't like the idea of three luxury hotel branded timeshares under one umbrella. It certainly wouldn't be good for the customer.



Not to mention that there’s a lot of overlap between the MVC and Vistana portfolio. Who needs that many resorts in Orlando, Palm Springs and Phoenix?

The Hyatt portfolio however would be a wonderful addition to any of the timeshare groups. Which I guess is probably why that won’t happen!


Sent from my iPhone using Tapatalk


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## lizap

amycurl said:


> Normally, I think there would be legitimate anti-trust concerns with an ILG/MVW merger. However, I don't think this DOJ would even bat an eyelash.



Very true statement..


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## nuwermj

amycurl said:


> Normally, I think there would be legitimate anti-trust concerns with an ILG/MVW merger. However, I don't think this DOJ would even bat an eyelash.



Why would you think there is an anti-trust issue -- regardless of who's running the DOJ? The top four firms manage less than 30% of the timeshare resorts. An ILG/MVW merger would not produce a concentration ratio anywhere close to the Anti-trust Division's trigger ratio.


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## JIMinNC

nuwermj said:


> Why would you think there is an anti-trust issue -- regardless of who's running the DOJ? The top four firms manage less than 20% of the timeshare resorts. An ILG/MVW merger would not produce a concentration ratio anywhere close to the Anti-trust Division's trigger ratio.



I think it would depend on how the DOJ defined the "market". If they define it as you suggest as all timeshares, then you are 100% correct, there is very little concentration in that very fragmented business. If, on the other hand, the market were defined as all hotel-branded timeshares, the concentration ratio would likely look very different. I'm sure if ILG and MVW ever do decide to follow FrontFour's urging and merge, they would focus their arguments on the entirety of the timeshare market, but opponents would focus on the hotel-branded timeshare market. DOJ would have to sort it out.

Back when I worked in banking, I had the opportunity to work on the merger application for several banks we were buying back in the 1980s and early 1990s. When we calculated the resulting market share in our application, we counted commercial banks, savings banks, finance companies, credit unions - basically any company involved in the broadest definition of banking - so our resulting share would be less. The groups who opposed our merger applications based their arguments only on the resulting marketshare in the commercial bank sector to present their case that the market was very concentrated. Given that during that time we grew by merger from a top 25 bank to a top 5 bank, the regulators always seemed to see it our way.


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## Helios

Would this be bad for the consumer?  As an owner in both systems, I think it could be good if the systems get merged like the Marriott/SPG Hotel...more choices...


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## dioxide45

Helios said:


> Would this be bad for the consumer?  As an owner in both systems, I think it could be good if the systems get merged like the Marriott/SPG Hotel...more choices...


You still have those choices today without a merged company. The problem with a merger is the costs of those choices. Just like consolidation in the airline industry, consolidation here probably can't be good either.


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## JIMinNC

Helios said:


> Would this be bad for the consumer?  As an owner in both systems, I think it could be good if the systems get merged like the Marriott/SPG Hotel...more choices...





dioxide45 said:


> You still have those choices today without a merged company. The problem with a merger is the costs of those choices. Just like consolidation in the airline industry, consolidation here probably can't be good either.



Most mergers involve elements that can be better for consumers (economies of scale, synergies, stability, etc.) coupled with elements that can be bad (less competition, higher prices, etc.). That's the case even with airline mergers. While the mergers in the airline industry have certainly  reduced competition and increased fares, most analysts believe that the industry is much better positioned now to weather economic downturns and avoid the disruptions and chaos that have plagued that business over the years with frequent bankruptcies and shutdowns. Similarly, in my old banking business, mergers have created large national institutions that can serve customers coast-to-coast when we move and travel, compete effectively with the large international banks, and serve the needs of the largest companies. But those same big banks, by their sheer size, pose greater risks to the economy and financial system, as we saw in 2008.


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## nuwermj

JIMinNC said:


> I think it would depend on how the DOJ defined the "market". If they define it as you suggest as all timeshares, then you are 100% correct, there is very little concentration in that very fragmented business. If, on the other hand, the market were defined as all hotel-branded timeshares, the concentration ratio would likely look very different. I'm sure if ILG and MVW ever do decide to follow FrontFour's urging and merge, they would focus their arguments on the entirety of the timeshare market, but opponents would focus on the hotel-branded timeshare market. DOJ would have to sort it out.



The industry players seem to define their market as all timeshares. Below are statements from annual 10-K financial reports submitted to the SEC. The hotel-branded timeshares and the others seem to be lumped together into the same market.  

Wyndham Vacation Ownership:
"The vacation ownership industry is highly competitive and is comprised of a number of companies specializing primarily in sales and marketing, consumer financing, property management and development of vacation ownership properties."

Bluegreen: 
"Major companies that now operate or are developing or planning to develop vacation ownership resorts directly or through subsidiaries include Marriott Vacations Worldwide Corporation, the Walt Disney Company, Hilton, Wyndham, ILG and Diamond Resorts International. Bluegreen also competes with numerous other smaller owners and operators of vacation ownership resorts."

Diamond Resorts:
"In our Vacation Interests sales and financing segment, we compete for prospects, sales leads and sales personnel from established, highly visible vacation ownership resort operators, as well as a fragmented array of smaller operators and owners. In marketing and selling VOIs, we compete against not only vacation ownership companies, but also the vacation ownership divisions of other hospitality companies. Our competitors include Bluegreen Corporation, Hilton Hotels Corporation, Marriott Vacations Worldwide Corporation, Vistana Signature Experiences, Inc. and Wyndham Worldwide Corporation. In addition, in certain markets, we compete with many established companies focused primarily on vacation ownership, and it is possible that other potential competitors may develop properties near our current resort locations and thus compete with us in the future."

Hilton Grand Vacation:
"Our primary competitors in the timeshare space include Marriott Vacations Worldwide, Wyndham Vacation Ownership, Vistana Signature Experiences, Disney Vacation Club, Hyatt Vacation Ownership, Holiday Inn Club Vacations, Bluegreen Vacations and Diamond Resorts International."

ILG:
"Principal competitors of Vistana and Hyatt Vacation Ownership in the sale of vacation ownership products include Diamond Resorts, Disney Vacation Club, Hilton Grand Vacations Club, Marriott Vacation Club Worldwide, and Wyndham Vacation Ownership. A number of the competitors in this business are larger with greater resources, distribution platforms, sales capabilities and access to capital for new projects than our business."

Marriott Vacations Worldwide:
"Our competitors in the vacation ownership industry range from small vacation ownership companies to large branded hotel companies that operate vacation ownership businesses. In North America and the Caribbean, we typically compete with companies that sell upscale tier vacation ownership products under a lodging or entertainment brand umbrella, such as Starwood Vacation Ownership (which includes the Westin and Sheraton brands), Hilton Grand Vacations Club, Hyatt Vacation Club, and Disney Vacation Club, as well as numerous regional vacation ownership operators."


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## Helios

dioxide45 said:


> You still have those choices today without a merged company. The problem with a merger is the costs of those choices. Just like consolidation in the airline industry, consolidation here probably can't be good either.


I see that.  In general, fewer choices means the supply side gets to set prices and can abuse (take advantage as much as the demand yields).

But, how about if all Marriott and Vistana properties are part of a single/seamless system.  Say there is a conversion from SOs to DVC points (same as SPG to MR seamless 3:1 conversion concept).  SO to DVC would have to be a different ratio in the other direction, say 25:1 (for discussion say HAR Plat+ 2BRLO to MKO High Season 2BRMK).  That flexibility is not there now.  Or, am I missing something?  I know you can do II but that is not the same.


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## BigMac

Hot off the press. Marriott Vacations has made a bid for ILG at $30/share. ILG share price immediately spiked almost 7%
https://seekingalpha.com/news/3299136-ilg-spikes-report-marriott-vacations-interest


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## GregT

BigMac said:


> Hot off the press. Marriott Vacations has made a bid for ILG at $30/share. ILG share price immediately spiked almost 7%
> https://seekingalpha.com/news/3299136-ilg-spikes-report-marriott-vacations-interest



That is unexpected.  I was under the impression that either Starwood or Hyatt (or both) had restrictive clauses in their agreements with ILG that impacted the ability for ILG to get acquired by a competing hotel brand.  Interesting, will see what happens.

Best,

Greg


----------



## Xpat

BigMac said:


> Hot off the press. Marriott Vacations has made a bid for ILG at $30/share. ILG share price immediately spiked almost 7%
> https://seekingalpha.com/news/3299136-ilg-spikes-report-marriott-vacations-interest



Interesting, if it's true I don't think it was meant to leak 30 minutes before market close. VAC actually rose on the news, so Wall Street must think the acquisition terms are good for Marriott Vacations.



GregT said:


> That is unexpected.  I was under the impression that either Starwood or Hyatt (or both) had restrictive clauses in their agreements with ILG that impacted the ability for ILG to get acquired by a competing hotel brand.  Interesting, will see what happens.



I think this is what you refer to: (from ILG's annual report)

_Both licenses contain restrictions on transfers by us without Starwood’s or Hyatt’s written consent of (1) the license agreement, (2) all or substantially all of the relevant licensed business or (3) a transaction or series of transactions that result in a “change of control” of ILG or Vistana or HVO. Written consent is not required for a “change of control” of ILG if on the date of the transaction that results in a “change of control” (1) ILG is publicly traded, or (2) ILG is not publicly traded but earnings from the licensed business do not comprise substantially all (90% for Hyatt license) of ILG’s EBITDA at such time; provided that the following conditions are satisfied as of the date of the transaction that resulted in a “change of control” of ILG (a) there are no uncured agreement level defaults, (b) all royalty fees have been paid, and (c) the transferee is not a competitor of the licensor in the hotel, vacation ownership or, for the Starwood license, certain similar transient stay distribution businesses. Vistana’s license also requires a maximum leverage ratio for an acquirer. 

Starwood and Hyatt may terminate their respective license agreement upon the occurrence of certain uncured, material defaults by us. Such defaults include, but are not limited to, a payment default, bankruptcy, a transfer in breach of the specified transfer restrictions or a material failure to comply with brand standards on a systemic level. 
_​Personally, I don't care much for the Vistana portfolio - too many resorts in the same old locations. But I'm not familiar with how Vistana works and wonder what other owners think (in particular those who own in both systems)

It will be interesting to see what they do with the Hyatt license and portfolio.


----------



## CalGalTraveler

GregT said:


> That is unexpected.  I was under the impression that either Starwood or Hyatt (or both) had restrictive clauses in their agreements with ILG that impacted the ability for ILG to get acquired by a competing hotel brand.  Interesting, will see what happens.
> 
> Best,
> 
> Greg



Marriott owns Starwood and would consent to the transfer.  Perhaps they plan to spin off Hyatt as part of the deal?

It makes strategic sense to align the Marriott/Starwood hotel brands with the associated Marriott/Vistana(Starwood) timeshare assets.  Maximizes marketing leverage and brand control.  Makes licensing less complicated and gives ILG/MVC more leverage in negotiation with Marriott International.


----------



## GregT

I'm not sure how much cross-pollination we would see in the different timeshare systems.  Wyndham owns both Worldmark and Wyndham and there is only limited inter-action between the two timeshare systems, and the point requirements can sometimes be extreme.  

It would be similar to Marriott Waiohai requiring 5,000 DC Points for a reservation, but using DC Points to reserve the Westin Princeville would require 7,500 DC Points.    This is imprecise, but the point is accurate.

I view this more as Marriott trying to access new (stable) forms of revenue and using the strength of their valuation as a currency.

We will see -- interesting to watch.

Best,

Greg


----------



## StevenTing

I will be interested to see how this plays out.  If this allows me more opportunities to travel without the disproportionate cost, I will welcome it. If the aquisition does go through, will we still have an II fee for DC and enrolled weeks?  I wish I could see the analysis performed that lead up to the offer.  I'd like to see the anticipated synergies and how they value them.


----------



## CalGalTraveler

True, in addition to stable revenue streams, acquisitions are the fastest way to generate topline growth for mid to large companies. Also a lot less risky than organic growth; Wall Street tends to reward growth by acquisition. Boosts the stockprice, CEO gets a nice bonus.

Not sure what this will mean for owners.


----------



## VacationForever

I do not see how Marriott will allow any sort of SOs conversion to DC points.  SOs acquisition is cheap, especially when we look at SVV.  Vistana is fractured in its model - mandatory resorts where resale makes $0 for Vistana, and having separate Flex systems - one for Sheraton Flex and one for Aventuras.   MVC is raking in huge $ with sale of points.  MVC will find ways to make $ from VSN resorts and for owners to enter into the same system or separately.  MVC knows how to put in an integrated model that makes $$$ for MVC, while making their product attractive for new and existing MVC owners.


----------



## mjm1

I too am interested to see how this plays out. We enjoy our ownerships in both MVC and Vistana. If it goes through, hopefully it will benefit us all as owners as well as the company. That doesn't have to be mutually exclusive. 

Best regards.

Mike


----------



## Superchief

Having been through 8 corporate mergers, I'm very skeptical. In my experience with mergers, only executives, lawyers, and investment bankers benefit. Customers, employees, and stockholders usually lose in the long run. MVC corporate has enough problems to resolve based on their lack of communication and poor management of the hurricane damage situation, not to mention the website incompetencies. They should get their own house in order prior to acquiring others.


----------



## dioxide45

Looks like an 11.7% over valuation based on ILGs stock price at open today. I suspect that will make FrontFour Capital Group LLC happy.

It will be interesting to see how it plays out and what will happen with Hyatt. Will Hyatt try to block the deal or cancel their license agreement? It could be possible that the combined company could re-brand those properties under Marriott or Westin or even Ritz Carlton or St Regis Residence Clubs. Also quite likely that ILG/VAC spins off the Hyatt company at the time of the merger.


----------



## BigMac

_*ILG’s operating businesses include Aqua-Aston Hospitality, Hyatt Vacation Ownership, Interval International, Trading Places International, Vacation Resorts International, VRI Europe, and Vistana Signature Experiences*_. Within this portfolio they manage 250+ resorts. Can't really see Marriott Vacation Club wanting to keep all of these but who knows.


----------



## dioxide45

From what I have read, this seems to perhaps still be rumor or at most VAC made an offer but no word if ILG actually accepted or even entertained the offer. No official word yet on a preliminary deal. On analyst thinks that $30 may just be an opening bid, perhaps there are other offers on the way.


----------



## Superchief

dioxide45 said:


> From what I have read, this seems to perhaps still be rumor or at most VAC made an offer but no word if ILG actually accepted or even entertained the offer. No official word yet on a preliminary deal. On analyst thinks that $30 may just be an opening bid, perhaps there are other offers on the way.


I, for one, really hope it doesn't go through. Owners experiences for existing MVC owners will deteriorate and I am looking forward to  using my portfolio in my retirement in a few years. MF's will go up and service will go down. I guarantee it.


----------



## vikingsholm

Bring it.

Want Hyatt in the Marriott family. Yeah!


----------



## CalGalTraveler

If they merge then their timeshare brands have a near monopoly on Kaanapali beach i.e. Hyatt Residences, MOC, Westin South, Westin North, Nanea.  No Wyndham, no Hilton that I am aware of. Only exception is Diamond and smaller TS such as Hona Koa etc.  

I hope that this could bring economies of scale in terms of renovation, maintenance and housekeeping to keep fees manageable.


----------



## amycurl

Right, because "near monopolies" always bring prices down for consumers. 

I'm pretty sure that is not how monopolies work, which is why we have anti-trust laws in the first place.

Sent from my iPad using Tapatalk


----------



## CalGalTraveler

Good point, however I don't think this will be the case for other locations in the network. Perhaps economies of scale is wishful thinking on my part.   FWIW, it's not like owners can easily to flip their timeshare from one brand to the other today.  So competition is already limited.


----------



## dioxide45

VacationForever said:


> I do not see how Marriott will allow any sort of SOs conversion to DC points.  SOs acquisition is cheap, especially when we look at SVV.  Vistana is fractured in its model - mandatory resorts where resale makes $0 for Vistana, and having separate Flex systems - one for Sheraton Flex and one for Aventuras.   MVC is raking in huge $ with sale of points.  MVC will find ways to make $ from VSN resorts and for owners to enter into the same system or separately.  MVC knows how to put in an integrated model that makes $$$ for MVC, while making their product attractive for new and existing MVC owners.


I would agree with this. Vistana isn't setup very well to merge in to the MVC or DC program. Another issue that Vistana has is that they have ROFR on so few of their properties. So it can be hard for them to take back cheap inventory. Their fractured model will make it hard to fully integrate. I also think, like Greg mentioned, that if a merger does happen, they will probably operate separately only really integrating back office functions to achieve savings. Like Wyndham, Shell and Worldmark, which are all still pretty separate. They may roll out some crossover booking abilities, but I would expect them to be rather point cost prohibitive. Think Explorer and Cruise bookings with points.


----------



## dioxide45

Thinking about possible integration, it would seem that Marriott could fairly easily integrate Vistana inventroy that they could control in to the DC program. There is nothing really stopping them from conveying Vistana weeks that they own in to the DC trust and offering them up on the DC points chart. Their problem however is getting control of inventory. Vistana only has limited properties with ROFR. Another would be how to handle properties that have their own small points programs in Vistana. Nanea, certain phases of St John, Aventuras, and Sheraton Flex. They have sold points packages out of these small Home Option based programs. They can't easily convey points in those setups over to the DC trust.

As for the Vistana weeks, they could convey any inventory that they would own over to the DC trust. Perhaps they could offer up buybacks or take backs to existing owners. They may even be able to get a lot of resale voluntary owners to simply give up their weeks given the big drop in Vistana inventory in II. They could also offer enrollment in the Destinations Club to Vistana owners where their enrolled weeks could be used in the DC exchange company. Their main challenge would be managing inventory with all the mini systems in a minis system that Vistana has created.


----------



## GregT

dioxide45 said:


> Thinking about possible integration, it would seem that Marriott could fairly easily integrate Vistana inventroy that they could control in to the DC program. There is nothing really stopping them from conveying Vistana weeks that they own in to the DC trust and offering them up on the DC points chart. Their problem however is getting control of inventory. Vistana only has limited properties with ROFR. Another would be how to handle properties that have their own small points programs in Vistana. Nanea, certain phases of St John, Aventuras, and Sheraton Flex. They have sold points packages out of these small Home Option based programs. They can't easily convey points in those setups over to the DC trust.
> 
> As for the Vistana weeks, they could convey any inventory that they would own over to the DC trust. Perhaps they could offer up buybacks or take backs to existing owners. They may even be able to get a lot of resale voluntary owners to simply give up their weeks given the big drop in Vistana inventory in II. They could also offer enrollment in the Destinations Club to Vistana owners where their enrolled weeks could be used in the DC exchange company. Their main challenge would be managing inventory with all the mini systems in a minis system that Vistana has created.



I think they will keep them separate.  There some anomalies in the StarOption schedule (like HRA in summer) and MOC has a major point premium versus WKORV.  It would be hard to fix this in point allocations.  Plus, Marriott doesn't need more Orlando properties.

I think trying to blend them would only create headaches that Marriott doesn't want and I think any cross pollination would be limited and done through Explorer Collection where they can advertise the possibility but never have to actually deliver it.

I could see where StarOptions owners could enroll their weeks and get some form of access but Marriott property dumps any redeemed week into Interval or rents it versus actually putting it into the Exchange.  It will be interesting to see it develop over time.

Best,

Greg


----------



## Heron

Here's how I'm guessing this will go. Vistana perks will decrease. When you come in for a special owner update just to hear all  the new options available to you, they will make a special offer for you to buy your way into the Marriott system. Don't worry, you'll get a much better deal than someone from the outside buying in I'm sure.


----------



## VacationForever

Does it mean we should all go out and buy a bunch of Vistana red/platinum weeks in the hope that we get them transferred before the cutoff date, and in the hope that the weeks can get enrolled?!


----------



## SueDonJ

Since the DC inception I've been expecting that eventually MVW will be integrating other-branded timeshares into the DC Exchange Company metric.  If this turns out to be the first foray, watching all the machinations is going to be very interesting.


----------



## dioxide45

VacationForever said:


> Does it mean we should all go out and buy a bunch of Vistana red/platinum weeks in the hope that we get them transferred before the cutoff date, in the hope that the weeks can get enrolled?!


I wouldn't take that gamble.


----------



## cubigbird

GregT said:


> I think they will keep them separate.  There some anomalies in the StarOption schedule (like HRA in summer) and MOC has a major point premium versus WKORV.  It would be hard to fix this in point allocations.  Plus, Marriott doesn't need more Orlando properties.
> 
> I think trying to blend them would only create headaches that Marriott doesn't want and I think any cross pollination would be limited and done through Explorer Collection where they can advertise the possibility but never have to actually deliver it.
> 
> I could see where StarOptions owners could enroll their weeks and get some form of access but Marriott property dumps any redeemed week into Interval or rents it versus actually putting it into the Exchange.  It will be interesting to see it develop over time.
> 
> Best,
> 
> Greg



This is already true as Ritz Carlton has a (small) timeshare system and it is separate from MVC but owners can access the separate clubs.


----------



## BigMac

Last Friday Oct. 6th on CNBC"s Mad Money, Jim Kramer spoke with Stephen Weisz, the CEO of VAC. Kramer brought up the news about VAC bidding for ILG and adding that he thought it was a good move. Weisz did not confirm or deny this which I think means they are probably doing something.


----------



## JIMinNC

BigMac said:


> Last Friday Oct. 6th on CNBC"s Mad Money, Jim Kramer spoke with Stephen Weisz, the CEO of VAC. Kramer brought up the news about VAC bidding for ILG and adding that he thought it was a good move. Weisz did not confirm or deny this which I think means they are probably doing something.



Here's a link to the interview with Cramer:

https://www.cnbc.com/2017/10/06/mar...e-ceo-talks-millennials-hurricane-impact.html

I had posted this a couple days ago in the Hurricane Irma thread since the most informative thing Weisz said was about the status of the St Thomas resorts, but since it was mentioned here, I thought I would repost the link.


----------



## dioxide45

BigMac said:


> Last Friday Oct. 6th on CNBC"s Mad Money, Jim Kramer spoke with Stephen Weisz, the CEO of VAC. Kramer brought up the news about VAC bidding for ILG and adding that he thought it was a good move. Weisz did not confirm or deny this which I think means they are probably doing something.


It seems that Marriott Vacations made on offer. It seems that either ILG is not accepting or there are additional negotiations happening. I am willing to bet the biggest hangup will be who heads the combined companies, Craig Nash or Steve Weisz.


----------



## Big Matt

This is all interesting to me.  When I look at what is going on with Marriott/Starwood, it wouldn't be surprising for them to try to buy Hyatt also.  This would give them most of the 3 and 4 star properties and some 5 star with Ritz Carlton.  Marriott has been upgrading their brands and doesn't really compete in the discount hotel business any longer.  

With timeshares, I think the industry is just about done and is in the process of being transformed into vacation ownership.  Having access to good inventory that is in high demand is the key ingredient in this business going forward.  I actually think Marriott has it figured out, but their pricing/value isn't always in sync.


----------



## JIMinNC

The other thing I could see happening if the VAC/ILG combination happens, is VAC changes their name to eliminate "Marriott" from the corporate name - maybe it just becomes Vacations Worldwide Corporation. They would then operate Marriott Vacation Club, Vistana, Hyatt, Interval International, etc. That would make it easier to keep all of the brands/programs separate, and then offer some type of internal exchange program either within II or separate from II, if they decide they want it to be more points-based than weeks-based.


----------



## nuwermj

Big Matt said:


> With timeshares, I think the industry is just about done and is in the process of being transformed into vacation ownership.



What is the difference between "timeshare" and "vacation ownership" as used by Big Matt?


----------



## dioxide45

nuwermj said:


> What is the difference between "timeshare" and "vacation ownership" as used by Big Matt?


Nothing really, just a way of branding timeshares so they don't have 'timeshare' in the name.


----------



## VacationForever

nuwermj said:


> What is the difference between "timeshare" and "vacation ownership" as used by Big Matt?


Marriott is marketing their Destination Club points as being able to use for vacationing experience beyond timeshare (resorts).  DC points can be used to book cruises (horrible value - 50% mark up), land tours (about 10 to 20% mark up), events, luxury homes (large luxurious homes) etc.


----------



## GaryDouglas

With all the ads on the radio for how to get rid of your timeshare, maybe "TimeShare" is becoming a four letter word....


----------



## VacationForever

GaryDouglas said:


> With all the ads on the radio for how to get rid of your timeshare, maybe "TimeShare" is becoming a four letter word....


Timeshare had been a four letter word for the longest time.  Whenever I use that word amongst people whom I know who do not own timeshare, they usually give me the look that say "Oh my she is so stupid" to "I feel sorry for her".


----------



## pwrshift

Makes me wonder if this is the first step to Marriott getting all of Hyatt too?


----------



## CalGalTraveler

VacationForever said:


> Timeshare had been a four letter word for the longest time.  Whenever I use that word amongst people whom I know who do not own timeshare, they usually give me the look that say "Oh my she is so stupid" to "I feel sorry for her".



+1  The sales process gives it a bad name. I am surprised a major news outlet hasn't done an undercover expose.

People don't have the same reaction when someone buys an expensive yacht or RV yet these items have similar loss in value and maintenance/docking/storage fees.  AND they are not easy to sell when you are done.

Timeshares = Horrendous Sales Process but an Excellent Product (resorts)

BTW...I just came across this 2016 article on Timesharing in Consumer Reports:

The Timeshare Comes of Age

https://www.consumerreports.org/travel/the-timeshare-comes-of-age/


----------



## icydog

It looks like it’s gonna happen. I just wish I owned the stock.  Look at this link to THE STREET report


----------



## Helios

Very interested in seeing if this happens.  I hope it does and I can combine my resale KoOlina with my Vistana units.


----------



## dioxide45

Helios said:


> Very interested in seeing if this happens.  I hope it does and I can combine my resale KoOlina with my Vistana units.


Even if it happens, there is no guaranty that they will allow any type of cross over between the two systems.


----------



## Helios

I know, one can hope.


----------



## youppi

If they permit the cross over, I doubt that they will do it for almost free like they did for the enrollment of weeks owners in the DC system if they spend a lot of money to acquire ILG.


----------



## dioxide45

youppi said:


> If they permit the cross over, I doubt that they will do it for almost free like they did for the enrollment of weeks owners in the DC system if they spend a lot of money to acquire ILG.


I doubt that VAC will actually pay out any cash in such a transaction. They will probably just issue VAC stock to ILG stock holders. Either way, they will want to use a merger or acquisition to save and make more money. They would be able to save money by merging back end operations. They can make more money by charging owners more fees and enrollment fees would be a big way to do that.


----------



## Helios

Do you mean Fees for Vistana and Hyatt owners to use Marriott properties?


----------



## VacationForever

Helios said:


> Do you mean Fees for Vistana and Hyatt owners to use Marriott properties?


I doubt that is going to happen.  I suspect the model will be like Wyndham's.  Hyatt, Vistana and Marriott all kept as different systems.  But if you buy from developer, then at 10 months, you can book at another system.


----------



## Helios

VacationForever said:


> I doubt that is going to happen.  I suspect the model will be like Wyndham's.  Hyatt, Vistana and Marriott all kept as different systems.  But if you buy from developer, then at 10 months, you can book at the another system.


That would make sense so they make new money. I hope they simply merge.  Marriott owners may be interested in Hyatt or Vistana properties.


----------



## VacationForever

Helios said:


> That would make sense so they make new money. I hope they simply merge.  Marriott owners may be interested in Hyatt or Vistana properties.


Their goal is only to make more money for their shareholders and C-suite.  There is no money in simply merging to provide greater access to EXISTING owners.  It is always about selling up.


----------



## Helios

I know that.  But, how do you explain the Marriott free week enrollments and Starwood allowing owners from resorts they bought to become VSN owners?


----------



## Helios

No money was made there.


----------



## VacationForever

Helios said:


> I know that.  But, how do you explain the Marriott free week enrollments and Starwood allowing owners from resorts they bought to become VSN owners?


Marriott built a brand new internal trading / booking system, aka the "Trust".  They needed to fund the "Trust" and hence they allowed existing owners (pre June 20 2010) to enroll so that they could help fill up the "Trust" with inventory.   It was for a small fee initially and later on free for some if they went to an owners' update.  Marriott needed the inventory and hence they allowed pre-June 2010 owners to enroll. 

I am not understanding what you meant by Starwood allowing owners from resorts they bought to become VSN owners.  If Marriott were to buy ILG, they will likely need to do something about the fragmented Vistana system - voluntary, mandatory, Sheraton Flex, Aventuras, St John CV and SB...  They are smarter than me and I do not have a clue how to transform it into a consolidated/coherent Vistana system.  But there is no way they will just allow Marriott owners to internally book Hyatt and Vistana inventory, and vice versa.  There is no money in it for them.


----------



## dioxide45

Helios said:


> I know that.  But, how do you explain the Marriott free week enrollments and Starwood allowing owners from resorts they bought to become VSN owners?


Marriott doesn't offer free week enrollments. Initially they were $595 up to $1995. They had a lot of owners enroll their weeks under that fee structure until they move to a flat $2395 enrollment fee. They are only now offering free enrollments for the last hold outs as long as they offer up their time to sit through a presentation. Vistana does not allow anyone buying resale to become members of VSN unless they they buy at a mandatory resort. If Vistana could, they would do away with mandatory resorts, but they wrote the the governing documents for those properties in such a way that they are stuck with them. Anyone buying direct from Vistana is in VSN. You can re-qualify a voluntary ownership if you pay big bucks to buy more from the developer. Marriott has offered similar at different times. But Marriott is all about fees for enrollment and if they allow cross use between programs, expect to have to pay for it.


----------



## tschwa2

Helios said:


> I know that.  But, how do you explain the Marriott free week enrollments and Starwood allowing owners from resorts they bought to become VSN owners?


Marriott's free week enrollment is only for owners of pre-2010 weeks who have refused enrollment multiple times with continually improving offers.  Marriott has there own reasons for trying to get them to enroll which may include trying to further erode Marriott availability in II or just wanting addition fees in the form of the annual fee paid to them.  By making Marriott inventory more scarce through II, they increase the value of their product DC points.  By allowing too many people to enroll for peanuts they would significantly decrease the value of DC points sold through Marriott.  

Which resorts has Vistana/Starwood allowed to enroll in the points program?


----------



## VacationForever

tschwa2 said:


> Marriott's free week enrollment is only for owners of pre-2010 weeks who have refused enrollment multiple times with continually improving offers.  Marriott has there own reasons for trying to get them to enroll which may include trying to further erode Marriott availability in II or just wanting addition fees in the form of the annual fee paid to them.  By making Marriott inventory more scarce through II, they increase the value of their product DC points.  By allowing too many people to enroll for peanuts they would significantly decrease the value of DC points sold through Marriott.
> 
> Which resorts has Vistana/Starwood allowed to enroll in the points program?


There are 5 resorts that were sold as "mandatory" and because it is written into the governing documents, they retain the right when resold.  Many times Vistana sales people have said unashamedly that if Starwood were to have done it again, they would never have made any resort mandatory as it kills of the revenue for new developer sales.


----------



## BJRSanDiego

I had a discussion with a Marriott GM earlier this week and (s)he stated that (s)he was on a telecon with Steve Weisz who said that there was no truth to the rumor and that it is all untrue.  So, either it is nothing but a rumor or Marriott wants to keep everyone guessing what is going on.  Or....


----------



## dioxide45

BJRSanDiego said:


> I had a discussion with a Marriott GM earlier this week and (s)he stated that (s)he was on a telecon with Steve Weisz who said that there was no truth to the rumor and that it is all untrue.  So, either it is nothing but a rumor or Marriott wants to keep everyone guessing what is going on.  Or....


Marriott or ILG won't announce anything until they have an agreement and approval by the boards. They won't even tell higher up people (like GMs and top level sales managers) until they make the same announcement to the public. Steve certainly wan't going to corroborate a rumor, if true, on a conference call with GMs.


----------



## BJRSanDiego

dioxide45 said:


> Marriott or ILG won't announce anything until they have an agreement and approval by the boards. They won't even tell higher up people (like GMs and top level sales managers) until they make the same announcement to the public. Steve certainly wan't going to corroborate a rumor, if true, on a conference call with GMs.


I've read stuff on some financial blogs and sites about this.  But has either Marriott VC or ILG made any press releases on any of this?


----------



## dioxide45

BJRSanDiego said:


> I've read stuff on some financial blogs and sites about this.  But has either Marriott VC or ILG made any press releases on any of this?


No announcement from VAC or ILG, no press release, nothing. Just some "source" mentioned that VAC made an offer of $30 a share.


----------



## BJRSanDiego

dioxide45 said:


> No announcement from VAC or ILG, no press release, nothing. Just some "source" mentioned that VAC made an offer of $30 a share.


I read something from Bloomberg and from Kramer.  They usually don't shoot from the hip.  This will be interesting as it proceeds....


----------



## dioxide45

BJRSanDiego said:


> I read something from Bloomberg and from Kramer.  They usually don't shoot from the hip.  This will be interesting as it proceeds....


Kramer had the CEO of VAC on his show and asked him about the rumors, which Steve Weisz refused to comment on. I think Kramer and Bloomberg were just talking about the initial rumors, not going off of anything official.


----------



## VacationForever

dioxide45 said:


> Kramer had the CEO of VAC on his show and asked him about the rumors, which Steve Weisz refused to comment on. I think Kramer and Bloomberg were just talking about the initial rumors, not going off of anything official.


But if it is not true, then Steve could easily have said that.  Silence tells me that there is something to that rumour.


----------



## dioxide45

VacationForever said:


> But if it is not true, then Steve could easily have said that.  Silence tells me that there is something to that rumour.


I would agree. I suspect they did make the offer of $30 a share that is rumored. It is quite possible that ILG turned down the offer or is out shopping other offers.


----------



## SueDonJ

VacationForever said:


> Marriott built a brand new internal trading / booking system, aka the "Trust".  They needed to fund the "Trust" and hence they allowed existing owners (pre June 20 2010) to enroll so that they could help fill up the "Trust" with inventory.   It was for a small fee initially and later on free for some if they went to an owners' update.  Marriott needed the inventory and hence they allowed pre-June 2010 owners to enroll. ...



MVW can't use enrolled Weeks "to fill up the 'Trust' with inventory" because owners who enroll their eligible Weeks do not give up ownership of their Weeks.  What's been conveyed to the Destination Club Trust are Weeks that MVW hadn't sold at the time the DC was established and since then, Weeks that MVW has purchased back or foreclosed upon and Weeks that have come online as either build-outs of existing resorts or new resorts.  The Trust conveyances, not enrolled Weeks, seed the pool from which DC Trust Points can be purchased.

Enrollment is different.  It simply gives Weeks Owners another usage option, which is to annually elect to convert enrolled Weeks to DC Points.  Those points can then be used in the DC Exchange Company or for any of the other offers made available through the DC.  Enrollment is not a permanent exchange of the Weeks for DC Points and Owners retain all of the original usage options, so it can't be said either that enrollment automatically seeds the DC Exchange Company.


----------



## Helios

tschwa2 said:


> Which resorts has Vistana/Starwood allowed to enroll in the points program?


I did no go through this so my info is fuzzy  but, didn’t SVO allowed legacy Vistana resorts to join SVN.  SVR and the rest of the FL resorts and SBP joined SVN.


----------



## Helios

VacationForever said:


> There are 5 resorts that were sold as "mandatory" and because it is written into the governing documents, they retain the right when resold.  Many times Vistana sales people have said unashamedly that if Starwood were to have done it again, they would never have made any resort mandatory as it kills of the revenue for new developer sales.


Agree, seamless integration would kill developer revenue.  But the MVC management revenue can be increased if they allowed cross reservations and charge a fee.  I am sure some MVC or Hyatt owners would like try say HRA or WSJ (once it gets back online)


----------



## Helios

In any case, I am just an owner with significant Vistana VOIs (in network), one resale post 2010 MKO unit, and one Hilton unit.  It is nice to dream about using the first two systems combined like I am using the Marriott and Starwood Hotels now.


----------



## dioxide45

SueDonJ said:


> MVW can't use enrolled Weeks "to fill up the 'Trust' with inventory" because owners who enroll their eligible Weeks do not give up ownership of their Weeks.  What's been conveyed to the Destination Club Trust are Weeks that MVW hadn't sold at the time the DC was established and since then, Weeks that MVW has purchased back or foreclosed upon and Weeks that have come online as either build-outs of existing resorts or new resorts.  The Trust conveyances, not enrolled Weeks, seed the pool from which DC Trust Points can be purchased.
> 
> Enrollment is different.  It simply gives Weeks Owners another usage option, which is to annually elect to convert enrolled Weeks to DC Points.  Those points can then be used in the DC Exchange Company or for any of the other offers made available through the DC.  Enrollment is not a permanent exchange of the Weeks for DC Points and Owners retain all of the original usage options, so it can't be said either that enrollment automatically seeds the DC Exchange Company.


Enrollment and owners that are converting their weeks to points does give Marriott inventory that they can use to help trust owners to book inventory through the exchange company. When Marriott started it all, the resorts in the trust were rather limited. Many trust owners would have been very disappointed in the product they purchased if Marriott never created the exchange company. The exchange company and enrolled weeks is what gives them the ability to sell a resort anywhere, even if the trust had no ownership in it. I think this is perhaps how VF was trying to convey, just perhaps the wording wasn't right? While Trust does not equal Exchange Company, Marriott is using the enrolled weeks that have converted to points to feed Trust owner reservations.


----------



## dioxide45

Helios said:


> Agree, seamless integration would kill developer revenue.  But the MVC management revenue can be increased if they allowed cross reservations and charge a fee.  I am sure some MVC or Hyatt owners would like try say HRA or WSJ (once it gets back online)


The basis for Marriott's entire Destinations Club model is no nickle and dime fees. They have a single annual DC fee that covers most fees related to your ownership. It is possible that if this happens, they could integrate the programs. I think it is a rather easy thing to do. They could charge an additional enrollment fee if you want to begin being able to exchange your Vistana weeks in the DC Exchange company. Who knows. Right now it is all rumor because no agreement has even been made for the two companies to merge.


----------



## VacationForever

deleted.


----------



## Helios

dioxide45 said:


> The basis for Marriott's entire Destinations Club model is no nickle and dime fees. They have a single annual DC fee that covers most fees related to your ownership. It is possible that if this happens, they could integrate the programs. I think it is a rather easy thing to do. They could charge an additional enrollment fee if you want to begin being able to exchange your Vistana weeks in the DC Exchange company. Who knows. Right now it is all rumor because no agreement has even been made for the two companies to merge.


This could be a way, charge a fee to join an exchange program.  Or, like it was said before, buy a unit and bring one into a merged system. There are a lot of ways this could be done while they still make money.  Will they do anything, time will tell.


----------



## VacationForever

Helios said:


> I did no go through this so my info is fuzzy  but, didn’t SVO allowed legacy Vistana resorts to join SVN.  SVR and the rest of the FL resorts and SBP joined SVN.



Let me touch on 2 components of the "fuzzy" info:
Sheraton Flex program comprises these resorts - SVV, SBP, SVR, SDO and Sheraton Steamboat and Jensen Beach.  This is a "Trust" that Vistana is selling points at a high cost.  As long as they are bought from the developer, they can book at these resorts at 12 months out and resale owners retain the use of this.  Only when bought from the developer, can the points be used as Star Option booking at 8 months out at other Vistana resorts.  When they are resold the new owner loses this ability, making this points voluntary - no SOs booking in SVN/VSN.

SVR has many phases that were sold prior to Starwood buying the resort from the Vistana corporation (yes, the original developer was called Vistana).  When Starwood bought SVR in around 1999, 2 phases were in active sales - Lakes and Cascades (1997-2000).  Newly sold Lakes and Cascades units were automatically part of SVN when Starwood formed the program in around 1999.  Owners who had bought from Vistana for the same 2 phases - Lakes and Cascades could join SVN.  In 2007, when significant special assessments were levied on SVR owners - all phases, Starwood also offered the owners from the other phases to join SVN when they paid the special assesments.  But Lakes and Cascades resale owners were not allowed into SVN even after they paid the special assessments.  I suspect Starwood needed inventory from the other phases to fill SVN.  I do not believe SBP and other Florida resorts were "allowed" into SVN.


----------



## Bunk

dioxide45 said:


> Enrollment and owners that are converting their weeks to points does give Marriott inventory that they can use to help trust owners to book inventory through the exchange company. ...I think this is perhaps how VF was trying to convey, just perhaps the wording wasn't right? While Trust does not equal Exchange Company, Marriott is using the enrolled weeks that have converted to points to feed Trust owner reservations.



Sorry Dioxide, i haven't followed this all that closely, but can't MVC also take, for the benefit of the trust, attractive MVC weeks that Unit Owners have deposited into Interval International and replace them with less desirable weeks.  E.g, if an owner deposits Oceana Palms into Interval,  can Marriott take that week for the benefit of the trust owners and substitute Fairway Villas in NJ )


----------



## Helios

Thanks for clarifying.  Obviously I did not know al the details.


----------



## SueDonJ

dioxide45 said:


> Enrollment and owners that are converting their weeks to points does give Marriott inventory that they can use to help trust owners to book inventory through the exchange company. When Marriott started it all, the resorts in the trust were rather limited. Many trust owners would have been very disappointed in the product they purchased if Marriott never created the exchange company. The exchange company and enrolled weeks is what gives them the ability to sell a resort anywhere, even if the trust had no ownership in it. I think this is perhaps how VF was trying to convey, just perhaps the wording wasn't right? While Trust does not equal Exchange Company, Marriott is using the enrolled weeks that have converted to points to feed Trust owner reservations.



I agree, minus the Exchange Company the DC wouldn't have a chance at success because like you say the Trust Members would have had a very limited inventory available to book reservations, and also because there would have been no mechanism for existing Weeks Owners to participate at all.  It's surprising, though, how many owners still believe that enrolling a Week equates to a permanent exchange of the Week for DC Points, so it's still important to clarify whenever something posted might be misconstrued.


----------



## SueDonJ

Bunk said:


> Sorry Dioxide, i haven't followed this all that closely, but can't MVC also take, for the benefit of the trust, attractive MVC weeks that Unit Owners have deposited into Interval International and replace them with less desirable weeks.  E.g, if an owner deposits Oceana Palms into Interval,  can Marriott take that week for the benefit of the trust owners and substitute Fairway Villas in NJ )



Yes, MVW can manipulate II and other inventory through the DC Exchange Company in order to fulfill reservation requests from DC Members.  That doesn't benefit the Trust to which Weeks have been permanently conveyed to seed the DC Trust Points pool, but instead benefits all DC Members - Trust and Exchange/Enrolled Members - who reserve intervals via the DC Exchange Company using DC Points.


----------



## CalGalTraveler

IMHO...this is why I *distrust* Trust / Points systems without a specific week deed underlying the ownership. Too many opportunities for the developer to play games and devalue the system.  MVC Weeks owners who enroll in DC and HGVC owners who have points with an underlying deed to a specific property, are more protected because they can always can fall back to using/renting/exchanging their deeded ownership and avoid the gaming if developers get too greedy.


----------



## Bunk

Assuming that the Hyatt and Vidanta timeshares are of comparable or better quality to MVC, would it make any sense for the DC Trust to take title to the unsold Hyatt and Vidanta shares.  Then MVC can try to get Hyatt and Vidanta owners to buy into the DC Trust.  Or in the alternative, what if MVC set up a super trust, which would provide that owners who paid even more money to MVC could enroll in the Super Trust and have access to all units, while the access of the others would be restricted to the timeshare that they purchased.


----------



## dioxide45

Bunk said:


> Assuming that the Hyatt and Vidanta timeshares are of comparable or better quality to MVC, would it make any sense for the DVC Trust to take title to the unsold Hyatt and Vidanta shares.  Then MVC can try to get Hyatt and Vidanta owners to buy into the DVC Trust.  Or in the alternative, what if MVC set up a super trust, which would provide that owners who paid even more money to MVC could enroll in the Super Trust and have access to all units, while the access of the others would be restricted to the timeshare that they purchased.


This would be ideal for the long term in trying to create a single product. The problem is that Vistana has a bunch of small points programs inside of the larger program. I believe Hyatt is moving to a pure poionts trust product. They would be starting out with a fractured program. Over time they could streamline things more within the DC product, it just won't be easy. I am sure that Hyatt won't like the arrangement. If it happens, I suspect those resorts won't be carrying that name.


----------



## vikingsholm

dioxide45 said:


> This would be ideal for the long term in trying to create a single product. The problem is that Vistana has a bunch of small points programs inside of the larger program. I believe Hyatt is moving to a pure poionts trust product. They would be starting out with a fractured program. Over time they could streamline things more within the DC product, it just won't be easy. I am sure that Hyatt won't like the arrangement. If it happens, I suspect those resorts won't be carrying that name.


I agree that Hyatt would probably want its name removed if this were to happen. But Marriott could still go ahead and rename the Hyatts to something else and group them separately (like Ritz timeshares are now in the DC), and integrate them into the overall Marriott DC points program, unless there is some clause in the current II/Hyatt agreement that would obstruct or prevent that. I imagine that Marriott could find a way to eventually integrate Hyatt and Vistana in some fashion if they complete the acquisition and want to do that.


----------



## dioxide45

The only issue is possible penalties to buy their way out of the Hyatt license agreement. I am sure that Hyatt is liking the flow of free money for simply using their name. Getting out of that might be costly.


----------



## pwrshift

SueDonJ said:


> Yes, MVW can manipulate II and other inventory through the DC Exchange Company in order to fulfill reservation requests from DC Members.  That doesn't benefit the Trust to which Weeks have been permanently conveyed to seed the DC Trust Points pool, but instead benefits all DC Members - Trust and Exchange/Enrolled Members - who reserve intervals via the DC Exchange Company using DC Points.


 
I've noticed an attitude change in my dealings with Marriott owners lately.  Before Irma I tried to book a studio week next year at BeachPlace during Spring Break using my Chairman discount status code 2vc and there were no availabilities unless I paid their prime time rate per day...about $500 a night, and this was months ago. I suspect any unsold weeks will go to DC members not weeks owners...and if you deposit it to II Marriott grabs them.

In addition, as an owner at Beachplace and concerned about the 'health' of the building I think they should have at least sent an email to all owners weekly since the hurricane damage just to keep us advised on the damage and repair progress. I posted on the BP Facebook page that request and got a snippy reply from the person answering on their FB page.  When I called the front desk person said only some rooms on six floors were open...that was about 2 weeks ago so hopefully it's better now.  Regardless, I think owners of BP should be kept up to date.  Would also be nice to know if the damage was covered by insurance and not increased MF.


----------



## Taylor Lewis

WalnutBaron said:


> Personally, I like good, healthy competition. This kind of merger would be anti-competitive.


I agree with you.


----------



## amycurl

Should this thread be closed or merged with the more recent threads on this topic?

[DONE - I just moved a short thread of 5-6 posts from the "All Other Timeshare Systems" and I just merged them with the thread on the same topic in the Marriott forum.]


----------



## dagger1

Shouldn’t affect our fixed weeks/units at HWOR and HMSS...  Wonder how it will affect our (floating) EOYO MKO?


----------



## dioxide45

amycurl said:


> Should this thread be closed or merged with the more recent threads on this topic?


What other threads are there? I checked the first page of the Marriott forum and didn't see anything else. I am still not aware that there is any official announcement, still just rumors. I know there are threads in the Vistana and Hyatt forums, but I am not sure it is appropriate to merge this thread with those.


----------



## DeniseM

dioxide45 said:


> What other threads are there? I checked the first page of the Marriott forum and didn't see anything else. I am still not aware that there is any official announcement, still just rumors. I know there are threads in the Vistana and Hyatt forums, but I am not sure it is appropriate to merge this thread with those.



I was still merging - I have since added a note in post #133.


----------



## amycurl

*That* was my 1,000 post?!? Jeez. Way to be impressive. *headdesk*

/move along, nothing to see here....


----------



## ryanmanos

CalGalTraveler said:


> IMHO...this is why I *distrust* Trust / Points systems without a specific week deed underlying the ownership. Too many opportunities for the developer to play games and devalue the system.  MVC Weeks owners who enroll in DC and HGVC owners who have points with an underlying deed to a specific property, are more protected because they can always can fall back to using/renting/exchanging their deeded ownership and avoid the gaming if developers get too greedy.




I worked for Marriott for 5 years at Shadow Ridge in Palm Desert Ca. The points are vastly superior to weeks. No exchange needed. You just pay more points  for better locations and better times of year. You can get into properties a HELL of a lot easier because the unsold inventory is what the points are sold against. The more the owners use for The Masters, Cruises and Safaris and not staying at their home resort, the more inventory. You can rent the property easier because now you can actually reserve the time you want to rent 12 and 13 months out at ANY PROPERTY not just your home resort and hope you get it in time on that 6am phone call to owner services.

And mind you the points are frozen deeded just like weeks.... POINTS are waayyyyyy better. Timeshare was a ton easier to sell though.. Simpler concept but tougher to use.


----------



## bazzap

ryanmanos said:


> I worked for Marriott for 5 years at Shadow Ridge in Palm Desert Ca. The points are vastly superior to weeks. No exchange needed. You just pay more points  for better locations and better times of year. You can get into properties a HELL of a lot easier because the unsold inventory is what the points are sold against. The more the owners use for The Masters, Cruises and Safaris and not staying at their home resort, the more inventory. You can rent the property easier because now you can actually reserve the time you want to rent 12 and 13 months out at ANY PROPERTY not just your home resort and hope you get it in time on that 6am phone call to owner services.
> 
> And mind you the points are frozen deeded just like weeks.... POINTS are waayyyyyy better. Timeshare was a ton easier to sell though.. Simpler concept but tougher to use.


As an enrolled weeks owner (with access to well over 20K DC points) I do find the added benefits and flexibility of points useful, especially for booking different periods at resorts/times with lower points demand.
It is also good not to have to depend on Interval, although exchanges with them are still working well for me.
“Vastly superior”... “waayyyyyy better” though, that is definitely not my experience.
I have still at times had to go on a waitlist when trying to make a points booking, whilst I have always been able to book my home weeks at 13 months out.
Using weeks has also been at a lower cost (both purchase and MFs), lower equivalent points value, with higher priority for villa preference at home resorts and I also have the advantage of lock off units.


----------



## dioxide45

ryanmanos said:


> I worked for Marriott for 5 years at Shadow Ridge in Palm Desert Ca. The points are vastly superior to weeks. No exchange needed. You just pay more points  for better locations and better times of year. You can get into properties a HELL of a lot easier because the unsold inventory is what the points are sold against. The more the owners use for The Masters, Cruises and Safaris and not staying at their home resort, the more inventory. You can rent the property easier because now you can actually reserve the time you want to rent 12 and 13 months out at ANY PROPERTY not just your home resort and hope you get it in time on that 6am phone call to owner services.
> 
> And mind you the points are frozen deeded just like weeks.... POINTS are waayyyyyy better. Timeshare was a ton easier to sell though.. Simpler concept but tougher to use.


I find it hard to beleive that Marriott is simply putting all inventory converted to explorer and cruises in to the exchange company for everyone to grab. According to MVCs earnings reporting, they are earning a large amount of money from rentals. That means they are actually renting out unsold inventory and the inventory converted to cruises and explorer. They have a need to monetize the inventory obtained from people booking explorer and cruises because Marriott pays actual cash to book those, they can't afford to just give that inventory back to owners through exchanges for nothing.

I do agree that booking in points is much easier as there is usually decent availability. The problem is that for Trust Point owners, it doesn't come cheap and can't beat the affordability of weeks.


----------



## mjm1

We met with a sales rep at MOC yesterday and she was very positive that MVC would complete the purchase of ILG. Time will tell if it happens and I take what she said with a grain of salt, as usual. She indicated that they want the Vistana and Hyatt properties in the system, but not II. Any unsold inventory of each system, as well as any ROFR, etc. activity, would be put into the DC Trust. Otherwise, those systems would be run as usual.

Again, time will tell.

Best regards.

Mike


----------



## vikingsholm

mjm1 said:


> We met with a sales rep at MOC yesterday and she was very positive that MVC would complete the purchase of ILG. Time will tell if it happens and I take what she said with a grain of salt, as usual. She indicated that they want the Vistana and Hyatt properties in the system, but not II. Any unsold inventory of each system, as well as any ROFR, etc. activity, would be put into the DC Trust. Otherwise, those systems would be run as usual.
> 
> Again, time will tell.
> 
> Best regards.
> 
> Mike


Hmm Mike, that's a bit puzzling. I'm surprised that if the head of MVC is not even going to comment on whether this acquisition is under consideration that they would not tell their sales agents to not speculate about it yet publicly. Yet I understand the impetus for saying anything to help make a sale.

The comment about MVC not wanting II is a bit odd too. I presume that means not operating the overall II trading system, but just focusing on obtaining Vistana and Hyatt properties? It's hard to imagine having only RCI as the sole remaining trading company that would have a large number of properties trading (what an ugly near monopoly that would be...), and Marriott dropping the rest of the II trading/renting infrastructure to just own Vistana and Hyatt (running them "as usual" also infers that they wouldn't be fully integrated into an internal Marriott trading/points system). So I'm seeing some grains of salt to be taken there also.


----------



## Fasttr

vikingsholm said:


> Hmm Mike, that's a bit puzzling. I'm surprised that if the head of MVC is not even going to comment on whether this acquisition is under consideration that they would not tell their sales agents to not speculate about it yet publicly. Yet I understand the impetus for saying anything to help make a sale.
> 
> The comment about MVC not wanting II is a bit odd too. I presume that means not operating the overall II trading system, but just focusing on obtaining Vistana and Hyatt properties? It's hard to imagine having only RCI as the sole remaining trading company that would have a large number of properties trading (what an ugly near monopoly that would be...), and Marriott dropping the rest of the II trading/renting infrastructure to just own Vistana and Hyatt (running them "as usual" also infers that they wouldn't be fully integrated into an internal Marriott trading/points system). So I'm seeing some grains of salt to be taken there also.


"Not Interested in II" could simply mean that after such an acquisition, they could then sell off just the II business, keeping the segments they do want.


----------



## vikingsholm

Fasttr said:


> "Not Interested in II" could simply mean that after such an acquisitions, they could then sell off just the II business, keeping the segments they do want.


Yeah, that does make a lot more sense than just folding it. Seems like a lot of hassle and risk just to acquire Vistana and Hyatt though.


----------



## mjm1

vikingsholm said:


> Hmm Mike, that's a bit puzzling. I'm surprised that if the head of MVC is not even going to comment on whether this acquisition is under consideration that they would not tell their sales agents to not speculate about it yet publicly. Yet I understand the impetus for saying anything to help make a sale.
> 
> The comment about MVC not wanting II is a bit odd too. I presume that means not operating the overall II trading system, but just focusing on obtaining Vistana and Hyatt properties? It's hard to imagine having only RCI as the sole remaining trading company that would have a large number of properties trading (what an ugly near monopoly that would be...), and Marriott dropping the rest of the II trading/renting infrastructure to just own Vistana and Hyatt (running them "as usual" also infers that they wouldn't be fully integrated into an internal Marriott trading/points system). So I'm seeing some grains of salt to be taken there also.





Fasttr said:


> "Not Interested in II" could simply mean that after such an acquisition, they could then sell off just the II business, keeping the segments they do want.





vikingsholm said:


> Yeah, that does make a lot more sense than just folding it. Seems like a lot of hassle and risk just to acquire Vistana and Hyatt though.



Yes, I took the comment to mean they would spin off or sell II, or it wouldn’t be included in the transaction. I agree that it is odd a sales person would comment on it when the CEO won’t. Then again, she is trying to make a sale and make the program sound better than it is, so I am not surprised she did it.

She also indicated that they had to let an 18 month window pass before they could do anything. As I recall she said there is another 5 months or so to go.

Mike


----------



## dioxide45

I am not sure it would make sense to spin off the exchange business, it is a pure fee for service revenue structure with low capital requirements. If Marriott wanted just Vistana and Hyatt so bad, why didn't they bid for them when they were on the selling block?


----------



## GregT

dioxide45 said:


> I am not sure it would make sense to spin off the exchange business, it is a pure fee for service revenue structure with low capital requirements. If Marriott wanted just Vistana and Hyatt so bad, why didn't they bid for them when they were on the selling block?



I'm with Dioxide on this one -- I think Marriott wants the recurring (stable) revenue streams from the exchange business plus however it can leverage the different timeshare systems.  I still think they will be separate.

Also, all the rumors about Marriott switching to RCI?  That could also be a reaction to the merger discussions -- Marriott has to dislike any appreciation in the ILG stock price, and what better way to put pressure on ILG stock price then to threaten to leave?

I vote with whoever said it first -- I bet nothing happens and we have status quo for awhile.  Mergers are hard to negotiate (and value) and now there is more visibility on it than Marriott wanted.  We will see.....

Best,

Greg


----------



## m61376

Meanwhile, VAC stock has hit record highs this week....


----------



## Helios

Has anyone heard anything new?


----------



## mjm1

We were at the Waikoloa property a few weeks ago and they didn’t have any additional insights. However, one sales rep at MOC said they had to wait until next spring when an 18 month t8me frame related to the ILG- Starwood transaction passed.

Best regards.

Mike


----------



## dioxide45

mjm1 said:


> We were at the Waikoloa property a few weeks ago and they didn’t have any additional insights. However, one sales rep at MOC said they had to wait until next spring when an 18 month t8me frame related to the ILG- Hyatt transaction passed.
> 
> Best regards.
> 
> Mike


It has been far more than 18 months since ILG acquired Hyatt. Perhaps they were referring to Starwood? Though it has already been 18 months since that happened.


----------



## mjm1

dioxide45 said:


> It has been far more than 18 months since ILG acquired Hyatt. Perhaps they were referring to Starwood? Though it has already been 18 months since that happened.



Yes, I meant to say Starwood. I edited my post. She was referring to the time frame that had to pass related the the tax free transaction. I don’t recall the details.

Mike


----------



## Helios

mjm1 said:


> We were at the Waikoloa property a few weeks ago and they didn’t have any additional insights. However, one sales rep at MOC said they had to wait until next spring when an 18 month t8me frame related to the ILG- Starwood transaction passed.
> 
> Best regards.
> 
> Mike



Thanks.  Never heard about this 18 months embargo.


----------



## Helios

mjm1 said:


> Yes, I meant to say Starwood. I edited my post. She was referring to the time frame that had to pass related the the tax free transaction. I don’t recall the details.
> 
> Mike


Ok, this clears it.


----------



## dioxide45

Helios said:


> Thanks.  Never heard about this 18 months embargo.


Not sure there is such an embargo. It was from a sales rep that would actually have zero knowledge about this certain transaction.


----------



## Helios

dioxide45 said:


> Not sure there is such an embargo. It was from a sales rep that would actually have zero knowledge about this certain transaction.


You are right, you can’t trust the sales people.  Could it be the tax free transaction period that was mentioned subsequently?  This is not my field of expertise, so I have no clue.


----------



## lizap

We own both Westin and Hyatt. The new Hyatt system is a mess. There is speculation that Hyatt is having trouble getting inventory for it's new system. Unlike what Marriott did, it is not willing to allow current owners to buy in at a reasonable cost. If Marriott could fix this mess, I'd be for it. There seems to be a complete lack of leadership at the top at Hyatt/ILG.


----------



## bizaro86

Helios said:


> You are right, you can’t trust the sales people.  Could it be the tax free transaction period that was mentioned subsequently?  This is not my field of expertise, so I have no clue.



The reverse morris trust transaction type used for the Vistana spin-off from Starwood requires a two year waiting period or you have the potential of paying tax on the transaction. I think I posted that earlier in the thread (have posted it on Tug before for sure). 

The sales rep probably reads Tug, or heard it from someone who does, and is trying to spin it to their own benefit...


----------



## hangloose

Maui sales rep indicated MVC bid for ILG was going through and that soon it will have a combined timeshare program inclusive of Vistana, Westin, Hyatt Residence, etc.  They also referenced the 18 month ‘embargo’ since the Marriott Starwood purchase, for dates when a unified program and other changes were coming.  Fun to wonder, but not sure this will happen anytime soon.


----------



## VacationForever

hangloose said:


> Maui sales rep indicated MVC bid for ILG was going through and that soon it will have a combined timeshare program inclusive of Vistana, Westin, Hyatt Residence, etc.  They also referenced the 18 month ‘embargo’ since the Marriott Starwood purchase, for dates when a unified program and other changes were coming.  Fun to wonder, but not sure this will happen anytime soon.


The lips were moving...


----------



## taffy19

I read this yesterday fwiiw.  There were some interesting questions why the high dividend and more.


----------



## BigMac

_*So Four Front, the financial group that started the merger idea almost a year ago, has written to the ILG stockholders to again make their case. It would seem that there is deep resistance from the current management of ILG. Perhaps as a defensive move they increased the ILG dividend this week. Here is the gist of their letter. Doesn't look like there will be a merger any time soon.*_

February 21, 2018

Dear Fellow ILG Stockholders,

May 24, 2017 we issued a public letter to the Company's Board of Directors (the "Board") outlining the strong strategic and financial rationale for a combination between ILG and Marriott Vacations Worldwide Corporation ("Marriott Vacations").&nbsp; At that time, we strongly believed that despite ILG's strong standalone prospects, such a combination would, in our view, maximize value for ILG's stockholders and result in (i) significant cost savings from the elimination of duplicative finance, IT, legal and sales &amp; marketing functions, (ii) robust revenue synergies given the ability to market to a combined Marriott Rewards and Starwood Preferred Guest loyalty program and (iii) the removal of the risk that ILG's Interval International exchange business could be negatively impacted should Marriott Vacations threaten to or actually not renew its contract. &nbsp;*Today, we believe that the financial merits to a transaction have only increased given the recent passage of corporate tax reform, which is a significant benefit to both companies.*" data-reactid="16" style="margin-bottom: 1em;">FrontFour Capital Group LLC (together with its affiliates, "FrontFour" or "we") is a significant stockholder of ILG, Inc. ("ILG" or the "Company").  On May 24, 2017 we issued a public letter to the Company's Board of Directors (the "Board") outlining the strong strategic and financial rationale for a combination between ILG and Marriott Vacations Worldwide Corporation ("Marriott Vacations").  At that time, we strongly believed that despite ILG's strong standalone prospects, such a combination would, in our view, maximize value for ILG's stockholders and result in (i) significant cost savings from the elimination of duplicative finance, IT, legal and sales & marketing functions, (ii) robust revenue synergies given the ability to market to a combined Marriott Rewards and Starwood Preferred Guest loyalty program and (iii) the removal of the risk that ILG's Interval International exchange business could be negatively impacted should Marriott Vacations threaten to or actually not renew its contract.  _Today, we believe that the financial merits to a transaction have only increased given the recent passage of corporate tax reform, which is a significant benefit to both companies._

May 2017, we have met with and spoken to a significant percentage of ILG's stockholder base, the overwhelming majority of which indicated that they would be in support of a business combination with Marriott Vacations, as well as Wall Street research analysts and industry participants who unequivocally agree that a potential merger between ILG and Marriott Vacations makes too much sense to ignore. &nbsp;Over the last eight months, we have continued to have private discussions with the Company's management team and the Board in an attempt to have a substantive two-way dialog regarding a path towards a value creating transaction.&nbsp; Unfortunately, despite our best efforts, we are concerned that certain social and governance factors are limiting the Board's ability to objectively evaluate such a transaction and represent stockholders' best interests.&nbsp; Accordingly, on January 29, 2018, we nominated four highly qualified director candidates for election to the Board at the Company's upcoming 2018 annual meeting of stockholders, who we believe will be valuable additions to the boardroom.&nbsp; &nbsp;&nbsp;" data-reactid="17" style="margin-bottom: 1em;">Since issuing our letter in May 2017, we have met with and spoken to a significant percentage of ILG's stockholder base, the overwhelming majority of which indicated that they would be in support of a business combination with Marriott Vacations, as well as Wall Street research analysts and industry participants who unequivocally agree that a potential merger between ILG and Marriott Vacations makes too much sense to ignore.  Over the last eight months, we have continued to have private discussions with the Company's management team and the Board in an attempt to have a substantive two-way dialog regarding a path towards a value creating transaction.  Unfortunately, despite our best efforts, we are concerned that certain social and governance factors are limiting the Board's ability to objectively evaluate such a transaction and represent stockholders' best interests.  Accordingly, on January 29, 2018, we nominated four highly qualified director candidates for election to the Board at the Company's upcoming 2018 annual meeting of stockholders, who we believe will be valuable additions to the boardroom.   

_We believe that the refusal to entertain such a compelling transaction in good faith that could both unlock significant stockholder value while also mitigating risk would call into question the Board's ability to satisfy its fiduciary duties._" data-reactid="18" style="margin-bottom: 1em;">We urge the Board to engage in good faith discussions with Marriott Vacations regarding a possible business combination and believe that an unwillingness to do so will result in a missed opportunity to (i) garner a sizeable premium to the current ILG share price, (ii)  allow ILG stockholder's to participate in the pro forma entity via the structuring of a transaction consisting of a combination of cash and stock, (iii) increase exposure to the faster growth Vacation Ownership business while diluting exposure to the no/low growth Exchange & Rentals business and (iv) remove the risk that Marriott Vacations could not renew its contract with Interval International. _We believe that the refusal to entertain such a compelling transaction in good faith that could both unlock significant stockholder value while also mitigating risk would call into question the Board's ability to satisfy its fiduciary duties._

It is our belief that management and certain members of the Board are entrenched, and as a result, significant changes to the composition of the Board are necessary.  We are writing you today as agents for all stockholders to ensure biased views and weak governance will not stand in the way of value maximization. We are confident that our nominees, who have significant transactional and operating experience  across the lodging, timeshare, gaming, real estate and broader leisure industry, will bring a fresh perspective to the Board that will enable them to represent stockholders' best interests.


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## hangloose

VacationForever said:


> The lips were moving...



Yes. MVC rep in Maui was very nice, professional, and no pressure. She was trying to sell me on a 4k DC Pts/Legacy Week Combo package to put me into Chairman's Club status. Total was $29k, so about $7/pt.   Push was four fold.  First, MVC was buying ILG soon (she said "done deal"...I said "only rumor")...thus changes were coming as MVC adds all Vistana, Westin, Hyatt into the DC Pts program (all available only to Trust owners).  Second, MVC Benefit Levels are going to increase soon...so Chairman's will no longer be 15k but higher (17k perhaps).   Third, more privileges coming to Presidential and Chairman's once the 18 month embargo is lifted and MVC can announce changes to their program as a result of the Marriott/SPG hotel deal (not sure how this ties into the timeshare side of things, but rather hotel only).  Fourth, DC Pts pricing will eventually get to $15-20 per pt, which is where Marriott wanted to start originally if the economy was not down when the program was introduced.   Not sure I see any of those happening near term.  And the rep was not willing to enroll my resale Hawaii weeks, without an equivalent DC Pts purchase (no surprise).  All in all...I said no and thanked her for her time.  

Lastly, she did say the Maui Sales Center will start a $3M reno soon to update and add newer technology.


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## dioxide45

BigMac said:


> So Four Front, the financial group that started the merger idea almost a year ago, has written to the ILG stockholders to again make their case. It would seem that there is deep resistance from the current management of ILG. Perhaps as a defensive move they increased the ILG dividend this week. Here is the gist of their letter. Doesn't look like there will be a merger any time soon.


This isn't really that surprising. I had read somewhere early on that the leadership of ILG wanted to retain control of any combined company. I am not sure that VAC leadership wouldn't want the same. So it would take some type of hostile takeover on the part of VAC to make this happen. It seems that if enough ILG stockholders are behind it, they could be successful.


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## rthib

Have to laugh about the Marriott/SPG deal being mentioned. As most people forget, including probably this sales rep, Marriott and Marriott Vacations Club are separate companies.


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## JIMinNC

I posted this in another thread on the Marriott Vacations Worldwide earnings conference call as part of a larger post on the ILG conference call and the things they said about the new marketing agreements with Marriott International. But given this thread was about the rumored merger offer for ILG by Marriott Vacations Worldwide, I thought this portion should fit here as well.

In their quarterly earnings conference call, the ILG CEO spent a couple of minutes talking about "Strategic Direction", which is often investment/corporate-speak for mergers and acquisitions. The bullets from that brief discussion were as follows:

They have complete confidence in their current strategic direction and business plan
The Board is nevertheless committed to exploring all paths to maximize shareholder value
The company and its advisors are engaged on a variety of strategic opportunities
The Board has designated a special strategic review committee composed of independent directors to evaluate strategic opportunities and the proper engagement with relevant parties
The Board, management, and their advisors are in discussions with multiple parties, but there is no assurance that any transaction will result from those discussions.
He then specifically stated he would answer no questions with regard to the strategic discussions.
I think this was most likely in response to the pressure from Front Four that was mentioned in BigMac's post a few posts up.


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## BigMac

JIMinNC said:


> I posted this in another thread on the Marriott Vacations Worldwide earnings conference call as part of a larger post on the ILG conference call and the things they said about the new marketing agreements with Marriott International. But given this thread was about the rumored merger offer for ILG by Marriott Vacations Worldwide, I thought this portion should fit here as well.
> 
> In their quarterly earnings conference call, the ILG CEO spent a couple of minutes talking about "Strategic Direction", which is often investment/corporate-speak for mergers and acquisitions. The bullets from that brief discussion were as follows:
> 
> They have complete confidence in their current strategic direction and business plan
> The Board is nevertheless committed to exploring all paths to maximize shareholder value
> The company and its advisors are engaged on a variety of strategic opportunities
> The Board has designated a special strategic review committee composed of independent directors to evaluate strategic opportunities and the proper engagement with relevant parties
> The Board, management, and their advisors are in discussions with multiple parties, but there is no assurance that any transaction will result from those discussions.
> He then specifically stated he would answer no questions with regard to the strategic discussions.
> I think this was most likely in response to the pressure from Front Four that was mentioned in BigMac's post a few posts up.



Thanks for posting the above. I listened to the webcast this morning. I got the impression their CEO was quite defensive about this. I don't really believe him that "* The Board, management, and their advisors are in discussions with multiple parties." . *One of the analysts did sneak in a question about their relationship with Marriott Hotels re sales centers after he touted this relationship but what it boiled down to was that they are being allowed to keep the same marketing agreements that they had with Starwood and nothing else.


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## mjm1

Here is an interesting development with a potential impact on whether MVC acquires ILG, or at least the price of doing so.

*Reuters: ILG explores merger with Apollo's Diamond Resorts*
Mar. 21, 2018 4:32 PM ET|About: Apollo Global Management, LLC (APO)|By: Carl Surran, SA News Editor 


Vacation timeshare property provider ILG Inc. (NASDAQ:ILG) is exploring a merger with Apollo Global Management's (NYSE:APO) Diamond Resorts International as an alternative to a sale, Reuters reports.

The talks are aimed at giving ILG leverage in case negotiations with Marriott Vacations about a potential buyout are not successful, according to the report.

A merger with APO would add more than 400 of Diamond Resorts' vacation destinations in 35 countries to ILG's 250 managed resorts in 80 countries, and could allow ILG CEO Craig Nash to lead the combined company.


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## vacationtime1

mjm1 said:


> Here is an interesting development with a potential impact on whether MVC acquires ILG, or at least the price of doing so.
> 
> *Reuters: ILG explores merger with Apollo's Diamond Resorts*
> Mar. 21, 2018 4:32 PM ET|About: Apollo Global Management, LLC (APO)|By: Carl Surran, SA News Editor
> 
> 
> Vacation timeshare property provider ILG Inc. (NASDAQ:ILG) is exploring a merger with Apollo Global Management's (NYSE:APO) Diamond Resorts International as an alternative to a sale, Reuters reports.
> 
> The talks are aimed at giving ILG leverage in case negotiations with Marriott Vacations about a potential buyout are not successful, according to the report.
> 
> A merger with APO would add more than 400 of Diamond Resorts' vacation destinations in 35 countries to ILG's 250 managed resorts in 80 countries, and could allow ILG CEO Craig Nash to lead the combined company.




The idea of an ILG/Diamond merger or acquisition should be terrifying to us in the Vistana world.  How long will the StarOption system last when Diamond finds it more profitable to offer a new "Club" with a hefty enrollment fee in its place?


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## littlestar

Interesting stuff for sure:

*ILG Issues Statement*
March 16, 2018 04:05 PM Eastern Daylight Time


MIAMI--(BUSINESS WIRE)--ILG (Nasdaq: ILG) today issued the following statement in response to a public letter from FrontFour Capital Group LLC on March 15, 2018.

“The assertions in FrontFour’s letter are not accurate. While we do not think it is productive to engage back and forth with FrontFour through press releases, and we intend to avoid doing so in the future, we believe it is important to address the issues raised in FrontFour’s letter. ”

FrontFour has spoken to independent directors of ILG’s Board on several occasions, and if FrontFour wants additional discussions with independent members of our Board, we are happy to arrange them.

FrontFour has notified ILG of its intention to nominate four directors for election to the Board at ILG’s 2018 Annual Shareholder Meeting. The ILG Board would like to interview those candidates, but despite our repeated requests, FrontFour has refused to make them available. We encourage FrontFour to make their nominees available for interviews so we can act with full information when determining whether or not to recommend that any of them be added to the Board.

Finally, record dates for annual meetings are customarily set shortly before the definitive proxy statement is mailed to shareholders, and ILG intends to follow that customary practice.”

*About ILG*

ILG (Nasdaq: ILG) is a leading provider of professionally delivered vacation experiences and the exclusive global licensee for the Hyatt®, Sheraton®, and Westin® brands in vacation ownership. The company offers its owners, members, and guests access to an array of benefits and services, as well as world-class destinations through its international portfolio of resorts and clubs. ILG’s operating businesses include Aqua-Aston Hospitality, Hyatt Vacation Ownership, Interval International, Trading Places International, Vacation Resorts International, VRI Europe, and Vistana Signature Experiences. Through its subsidiaries, ILG independently owns and manages the Hyatt Residence Club program and uses the Hyatt Vacation Ownership name and other Hyatt marks under license from affiliates of Hyatt Hotels Corporation. In addition, ILG’s Vistana Signature Experiences, Inc. is the exclusive provider of vacation ownership for the Sheraton and Westin brands and uses related trademarks under license from Starwood Hotels & Resorts Worldwide, LLC. Headquartered in Miami, Florida, ILG has offices in 15 countries and more than 10,000 associates. For more information, visit www.ilg.com.

*Additional Information*

ILG intends to file a proxy statement and white proxy card with the U.S. Securities and Exchange Commission (the “SEC”) in connection with its solicitation of proxies for its 2018 Annual Meeting of Stockholders (the “2018 Annual Meeting”). ILG stockholders are strongly encouraged to read the definitive proxy statement (and any amendments and supplements thereto) and accompanying white proxy card when they become available as they will contain important information. Stockholders may obtain the proxy statement, any amendments or supplements to the proxy statement and other documents as and when filed by ILG with the SEC without charge from the SEC’s website at www.sec.gov.

*Certain Information Regarding Participants*

ILG, its directors and certain of its executive officers may be deemed to be participants in connection with the solicitation of proxies from ILG’s stockholders in connection with the matters to be considered at the 2018 Annual Meeting. Information regarding the ownership of ILG’s directors and executive officers in ILG stock is included in their SEC filings on Forms 3, 4, and 5, which can be found through the SEC’s website at www.sec.gov. Information can also be found in ILG’s other SEC filings. More detailed and updated information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, will be set forth in the proxy statement and other materials to be filed with the SEC. These documents can be obtained free of charge from the sources indicated above.


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## dioxide45

mjm1 said:


> and could allow ILG CEO Craig Nash to lead the combined company.


I think this is the crux of the issue with a VAC merger. Craig wants to be in charge and I doubt any merger with VAC would go that way.


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## mjm1

vacationtime1 said:


> The idea of an ILG/Diamond merger or acquisition should be terrifying to us in the Vistana world.  How long will the StarOption system last when Diamond finds it more profitable to offer a new "Club" with a hefty enrollment fee in its place?



Robert, I agree. I would hate to see Vistana under the Diamond umbrella.

Mike


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## VacationForever

mjm1 said:


> Robert, I agree. I would hate to see Vistana under the Diamond umbrella.
> 
> Mike


If this happens, I am giving away my Vistana...


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## bizaro86

In an ILG/Diamond merger, ILG would be the buyer. They are worth about 2 billion more than Apollo paid for Diamond, and if they offered a premium (to save their ceos job) Apollo would absolutely sell. They care about price and not who would run it after, while the ILG ceo owns a bit of stock but has a great job, so the incentives are different.


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## nuwermj

vacationtime1 said:


> The idea of an ILG/Diamond merger or acquisition should be terrifying to us in the Vistana world.  How long will the StarOption system last when Diamond finds it more profitable to offer a new "Club" with a hefty enrollment fee in its place?



I don't understand. ILG would remain in control ("Such a deal could also allow ILG CEO Craig Nash to lead the combined company"). The Diamond leadership would be out (hurray, hurray), and Diamond would be under the Vistana umbrella. What am I missing?


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## JIMinNC

nuwermj said:


> I don't understand. ILG would remain in control ("Such a deal could also allow ILG CEO Craig Nash to lead the combined company"). The Diamond leadership would be out (hurray, hurray), and Diamond would be under the Vistana umbrella. What am I missing?



I think the fear is the stench associated with Diamond is so strong that it would infect ILG/Vistana. As a former Diamond owner myself, I can understand the concern.


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## dioxide45

nuwermj said:


> I don't understand. ILG would remain in control ("Such a deal could also allow ILG CEO Craig Nash to lead the combined company"). The Diamond leadership would be out (hurray, hurray), and Diamond would be under the Vistana umbrella. What am I missing?


Diamond would be under the ownership of ILG, not necessarily Vistana. Think Hyatt and Vistana. They are both owned by ILG but Vistana doesn't own Hyatt and Hyatt doesn't own Vistana.


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## BigMac

Looks like ILG wants to get tacky inferior diamond resorts as a poisoned pill to thwart any VAC takeover.


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## nuwermj

dioxide45 said:


> Diamond would be under the ownership of ILG, not necessarily Vistana. Think Hyatt and Vistana. They are both owned by ILG but Vistana doesn't own Hyatt and Hyatt doesn't own Vistana.



Ok, but this clarification doesn't answer my question. Why do some TUGers think the StarOption system would be endangered by a ILG/DRI merger? ILG's management will remain in charge of the combined organization.


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## dioxide45

nuwermj said:


> Ok, but this clarification doesn't answer my question. Why do some TUGers think the StarOption system would be endangered by a ILG/DRI merger? ILG's management will remain in charge of the combined organization.


It really wouldn't. ILG acquiring Hyatt and Wyndham acquiring Worldmark and Shell really didn't change their systems. The offers some extra perks to cross over, but the underlying systems never changed. I doubt Diamond would really have any impact on the VSN StarOption system.


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## VacationForever

dioxide45 said:


> It really wouldn't. ILG acquiring Hyatt and Wyndham acquiring Worldmark and Shell really didn't change their systems. The offers some extra perks to cross over, but the underlying systems never changed. I doubt Diamond would really have any impact on the VSN StarOption system.


There will always be more differences, also called money grab.  Wyndham is tightening the screws on Worldmark, with guest certificatte fees beyond one booking per X points etc... there used to be no restrictions/no fees, slow transfers, and enticing owners to give the proxy to Wyndham through sweepstakes so that they can change the owner-friendly rules of Worldmark.  I feel more uneasy with Vistana ownership under ILG, starting with the new guest certificate fees and also slow transfers.  Not sure what else is coming down the line.


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## nuwermj

BigMac said:


> Looks like ILG wants to get tacky inferior diamond resorts as a poisoned pill to thwart any VAC takeover.



Automobile companies market different product lines to differ market segments -- Toyota and Lexus; Chevrolet and Cadillac. Could ILG market Hyatt and Vistana to the high end market and Diamond to the mid level market?


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## Xpat

[Merging with existing thread]

According to Reuters:

https://uk.reuters.com/article/uk-i...-clinch-merger-with-ilg-sources-idUKKBN1HN1VE


Sent from my iPhone using Tapatalk


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## herillc

Hmmm it will be very interesting...
So Marriott will be the owner of ILG?


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## rickandcindy23

https://www.nytimes.com/reuters/2018/04/16/business/16reuters-ilg-m-a-marriott-vaca-exclusive.html


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## rickandcindy23

I am trying to figure out why Marriott would want ILG, which includes the exchange company as well.  How big of a player does Marriott want to be in the timeshare industry.  I thought the timeshares were managed by a completely different entity than Marriott hotels?  This is baffling.  But if Marriott did acquire ILG, would we see more Residence Inn accommodations as exchanges?  I saw a few weeks about a year ago showing as II exchanges at the Residence Inn in Anaheim but couldn't fit the dates into my schedule.


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## VacationForever

rickandcindy23 said:


> I am trying to figure out why Marriott would want ILG, which includes the exchange company as well.  How big of a player does Marriott want to be in the timeshare industry.  I thought the timeshares were managed by a completely different entity than Marriott hotels?  This is baffling.  But if Marriott did acquire ILG, would we see more Residence Inn accommodations as exchanges?  I saw a few weeks about a year ago showing as II exchanges at the Residence Inn in Anaheim but couldn't fit the dates into my schedule.



Marriott timeshares are managed by a completely different entity from Marriott hotels.  They are separate business and no, you won't see Residence Inn accommodations as exchanges.  Was the Residence Inn an exchange or a getaway?  I cannot imagine Residence Inn being available as an exchange at all.

I think what Marriott will gain is the ability to control more of the premium timeshare brands and maybe "save" from payments to II for MVC DC members, but I think these payments are small potatoes and cannot be the main reason for the merger.  What they will do with it, only time will tell.  My biggest fear is that they will do something like Wyndham where developer-bought timeshare has access to Shell and Worldmark inventory at 10 months.  Frankly speaking, we really love Marriott timeshare resorts and do not like competition from other systems into Marriott's inventory pool.  I hope they will be kept separate.  Our good friends who own a ton of Vistana, all developer bought, are hoping that the merger means that they will have access to the Marriott timeshare system.


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## rickandcindy23

Residence Inn in Anaheim was offered as an exchange.  I posted the sighting back then.


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## rickandcindy23

My sighting:
https://tugbbs.com/forums/index.php...d-never-have-seen-residence-inn-in-ii.245475/
And when I did my search, I saw a lot of people posted about Residence Inn being in Getaways on II, as you suggested.  Interesting.


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## VacationForever

rickandcindy23 said:


> My sighting:
> https://tugbbs.com/forums/index.php...d-never-have-seen-residence-inn-in-ii.245475/
> And when I did my search, I saw a lot of people posted about Residence Inn being in Getaways on II, as you suggested.  Interesting.


Got it.  I did a search and found it too, back in Aug 2016.  I have also seen some last minute stuff that are available in both Getaways and Exchange at resorts that were never available as Exchanges.  Maybe II can make exception for crossovers, and splits the revenue between the hotel and II.


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## Quilter

Lots of questions.

The article says “merger”.

Who is acquiring who?  Will it be a blended corporation like Marriott and SPG?

It will probably take years to complete.  (Think AA and US Air).  

If IT has trouble with the current system it seems a nightmare in the making.


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## Swice

Very curious who would come out on top-- Marriott or ILG.     ILG is worth about a half B-billion more than Marriott at the moment.   
Lots of change coming--- Marriott vacations and Marriott Rewards (Is gold really gold anymore???).


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## VacationForever

Quilter said:


> If IT has trouble with the current system it seems a nightmare in the making.



Now that I have spent enough time on the MVC system, the Vistana one is way superior.  With the Vistana system, you know which bucket of points that you are using to book, when you cancel and rebook are all done real time.


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## Xpat

Looks like Wall Street is liking the idea of an acquisition - both ILG and VAC up 7% and 6%.


Sent from my iPhone using Tapatalk


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## vacationtime1

I like this acquisition -- mostly because I was terrified that Apollo Global Management (the private equity firm that currently runs DRI) would be the purchaser.  Under Apollo's plan, DRI was to run the expanded ILG which could wreak havoc on Marriott and Vistana owners' rights.


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## rickandcindy23

vacationtime1 said:


> I like this acquisition -- mostly because I was terrified that Apollo Global Management (the private equity firm that currently runs DRI) would be the purchaser.


I know!  I would have to sell everything I own in Vistana (formerly Starwood).


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## dioxide45

vacationtime1 said:


> I like this acquisition -- mostly because I was terrified that Apollo Global Management (the private equity firm that currently runs DRI) would be the purchaser.  Under Apollo's plan, DRI was to run the expanded ILG which could wreak havoc on Marriott and Vistana owners' rights.


I think you mean Hyatt instead of Marriott, since ILG doesn't own Marriott (at least not yet). Apollo would just be in it for the money. If ILG were to be acquired by Apollo, chances are that they would be willing to spin off Vistana and just sell them to Marriott for a hefty price tag.


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## JIMinNC

rickandcindy23 said:


> I am trying to figure out why Marriott would want ILG, which includes the exchange company as well.  How big of a player does Marriott want to be in the timeshare industry.  I thought the timeshares were managed by a completely different entity than Marriott hotels?  This is baffling.  But if Marriott did acquire ILG, would we see more Residence Inn accommodations as exchanges?  I saw a few weeks about a year ago showing as II exchanges at the Residence Inn in Anaheim but couldn't fit the dates into my schedule.



The company that might merge with ILG is NOT the Marriott International, Inc. hotel company (MAR). The merger would be between ILG and Marriott Vacations Worldwide (VAC), the company that owns and manages Marriott Vacation Club.

I think the appeal is combining the Marriott Vacation Club, Westin Vacation Club, and Sheraton Vacation Club under the same corporate umbrella. All three of those brands are now owned by MAR, so after a merger, VAC would control all the Marriott-owned timeshare brands. Who knows, they might even sell or spin-off the exchange business after a merger.


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## Superchief

Having been through several mergers myself, the only people who benefit are the bankers, lawyers, and executives. Customers, employers and shareholders typically get hosed. I have not yet observed a merger for which the combined company is better for customers after the merger. Be careful what you wish for.


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## vacationtime1

Superchief said:


> Having been through several mergers myself, the only people who benefit are the bankers, lawyers, and executives. Customers, employers and shareholders typically get hosed. I have not yet observed a merger for which the combined company is better for customers after the merger. *Be careful what you wish for.*



What I wish for is no changes at all.

What I fear is a predatory private equity firm having any control over my timeshare life.


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## VacationForever

I also hope there will be no change after the merger but I know there will be and it is to the detriment of owners.  I like what I own and I just do not want any sort of mingling of the programs.  By co-mingling brands, that means everything will get more expensive for owners and new owners in order to pump the pockets of the corporation/private equity/significant shareholders.


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## dioxide45

VacationForever said:


> I also hope there will be no change after the merger but I know there will be and it is to the detriment of owners.  I like what I own and I just do not want any sort of mingling of the programs.  By co-mingling brands, that means everything will get more expensive for owners and new owners in order to pump the pockets of the corporation/private equity/significant shareholders.


Any time there is consolidation in an industry, there is little benefit to the customers. Prices up and benefits down.


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## GregT

I think this would be a non-event for us -- Having Marriott control ILG (and Starwood and Hyatt properties) is alot like Wyndham/RCI and Worldmark.  There is some cross-pollination between the systems (that is "beneficial" but expensive).

With Worldmark, I could book Wyndham properties 9 months out -- but Wyndham owners get access 10 months out, so I get the leftovers.   In a Marriott/ILG example, at 7 months out (which is an important date), I could internally trade my Marriott Shadow Ridge Week for a Harborside Resort at Atlantis (if HRA was available), and I would pay $99 for the trade.  The problem is that 8 months out, HRA is available for other StarOptions trades, so there is little actually left at 7 months out to match the Marriott trade.   Each system has it's own existing rules that complicate the ability to cross-pollinate.

I think this is about Marriott trying to diversify and find revenue sources that are less volatile than selling points.   Exchange fees/rental revenues are more stable.  Marriott probably has a bunch of weeks that they deposit into II and inefficiently monetize and that this is an opportunity to get $XXX in Getaway Revenue.  Plus---- Wall Street likes activity, not complacency.  We will see.

But I do not think we will see any real positive or negative.

Best,

Greg


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## JIMinNC

dioxide45 said:


> Any time there is consolidation in an industry, there is little benefit to the customers. Prices up and benefits down.



True in many cases, but not all. One example is banking - an industry in which I spent over 20 years and was involved in many mergers. When I first started in that business, banks could not operate branches and ATMs across state lines from the state in which they were headquartered. As a result, we had a lot of small to medium sized banks in the US. The industry was very fractured. When those laws changed, allowing banks to grow, merge, and expand nationally, consumers and businesses both benefitted in many ways. 

For example, In the last week I've been at home in NC, in Florida on business, and now in SC on vacation. My bank has branches and ATMs in all three places (as well as most other key destinations in the US). I can use their ATMs without paying fees and can use a branch if I need to when traveling. When my son moved to a new state for college and his first job, he didn't have to set up a new bank account. He could stay with the same bank. Back in 1980 when I first entered banking, that would have all been impossible.

Business has also benefitted, because when I started in banking, virtually all of the top banks in the world were based in Europe, Japan, or China. Because of the old restrictions that kept US banks small by comparison, larger companies had to deal with different banks in every state in which they operated and the credit needs of the largest companies could not be handled by a single US bank. US banks had to put together consortiums of US and foreign banks to provide the credit larger companies needed. Now, with bigger US banks, our banks can meet the needs of more big companies.

Obviously, there have also been negatives to consolidation - "too big to fail" is the most notable - but those are more artifacts of the regulatory environment not changing as the size and complexity of the banks changed. The regulatory infrastructure was still oriented toward smaller, less systemically risky institutions, so the financial crisis of 2008 helped teach us that the regulations and oversight needed to evolve as the banks grew.


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## BocaBoy

There seem to be an awful lot of folks commenting who see only bad things from a potential merger of ILG and VAC.  Reminds me of all the doomsday predictions when VAC was spun off from Marriott International.  Some of us who saw that spin-off as a real opportunity were ridiculed, but now I think the benefits are obvious.  Could be the same thing here, although I am not smart enough to have a solid opinion on this one.


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## BocaBoy

herillc said:


> Hmmm it will be very interesting...
> So Marriott will be the owner of ILG?


Not necessarily.  Maybe ILG would be the ones calling the shots.  We really do not know.


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## VacationForever

BocaBoy said:


> Not necessarily.  Maybe ILG would be the ones calling the shots.  We really do not know.


What I know is that if MVC allows Hyatt and Vistana owners to book Marriott inventory at X months like Wyndham/Worldmark/Shell program, I would not be too happy as a Presidential member as the 60-day inventory will be reduced.


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## Theiggy

Saw this today.
https://www.reuters.com/article/us-...-clinch-merger-with-ilg-sources-idUSKBN1HN1VC


Sent from my iPhone using Tapatalk

_[Threads merged.]_


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## dougp26364

This would be an interesting merger if, and it sounds like a big if, it comes to be. I would love to see the Hyatt’s in Key West and Sedona avaiable for internal weeks exchange or points reservations


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## Mr. Vker

I'm already calling Hyatt and Vistana for reservations. LET ME IN!


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## kds4

I don't know enough about the other companies products, but wonder if (like the hotel rewards programs) there will be a way to integrate the owners of the varied timeshares into the DC points program or if they will have to remain distinctly separate for booking/usage despite having a singular owner (were MVCI to acquire them)?


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## kds4

If you want to get to the substantive portion of the video, skip to the 20:00 mark and start there. David Flueck begins speaking right after.


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## Fairwinds

When diamond bought a TS company I owned l believe you had to enroll in their program or just stay the same. I never was interested so I don’t know the details but kind of like Marriott did with the points program. So I suspect they would have to establish a new bucket to hold points/inventory. I wonder what that would cost to gain access?


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## dioxide45

Old news 

https://tugbbs.com/forums/index.php...-talk-multi-merged.256217/page-8#post-2128014


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## NiteMaire

JIMinNC said:


> I think the appeal is combining the Marriott Vacation Club, Westin Vacation Club, and Sheraton Vacation Club under the same corporate umbrella. All three of those brands are now owned by MAR, so after a merger, VAC would control all the Marriott-owned timeshare brands. Who knows, they might even sell or spin-off the exchange business after a merger.



That's precisely what a VAC salesman told me yesterday during our update...bring the TS brands together, but not keep the exchange business. Time will tell if his lips were moving.

Sent from my sweet Samsung Note 8 using Tapatalk


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## krj9999

I guess we have our answer.


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## mdurette

deleted - this info in another thread.


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## WBP

Hopefully the Moderator does not merge the REAL news of today's acquisition of ILG by MVW, vs the speculation contained in this thread.


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## SueDonJ

Now that an announcement has been made this speculation thread is being closed.  See *Marriott Vacations Worldwide (VAC) purchase of Interval Leisure Group (ILG) discussion!*


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