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.
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.