Bluegreen to be bought by Diamond

[rapmarks]

I remember after Bluegreen took over Shenendoah Crossing from RDI, they sold off the golf course there.
I have some concerns about what they will do to Christmas Mountain.
some changes at CMV this year:
they closed the restaurant for 3 nights a week and continued this during the busy season.
they have closed down Jolly's and said it would next open for ski season after spending a lot of money on it last year.
they have stopped doing the Luau
the Trading Post is sitting there empty and abandoned.

they say the golf course operates at a loss, but this is perhaps because they give free passes to prospective buyers and do not reimburse the course or ski hill for the free golf and skiing for Timbers owners.
They have as many as 450 plays a day on the golf course, so it should be able to turn a profit.
so I am concerned they will sell off or close the ski hill, which has always lost money, and perhaps close at least one nine of the golf course.

 

[Twinkstarr]

I just wonder how DRI will finance this transaction. I am assuming that shareholders in BXG will want cash, especially since DRI is a private company and structured as an LLC.

So, assuming that this transaction is financed with debt, $500M acquisition with a very conservative note of 12% would cost $60M per year in debt service with some very stringent debt convenances. That's $15M per quarter.

Today, Bluegreen announced earnings. It only produced $3.4M in quarterly earnings. Just to service debt, DRI will have to prove immediate synergies that will significantly flow to the bottom line. That's a very tall order.

I think Bluegreen already has about $400M+ in debt. So, it's not like DRI can raid an over funded pension fund or secure debt against current assets of Bluegreen. I'd love to see the investor pitch on this deal. Talk about pulling a rabbit out of the hat.

I just wonder where they are going to get the money, private placement of some notes?

Perhaps they will sell off some of the BG property that "doesn't" fit with the DRI portfolio of resorts?

 

[AwayWeGo]

Price Increases Coming ?

I just wonder where they are going to get the money, private placement of some notes?

What's to keep'm from jacking up the price to join T.H.E. Club ?

Ditto annual club dues ?

Also, exchange fees ?

Not to mention higher sticker prices on full-freight BlueGreen & Diamond timeshares ?

In addition, possibly also raising management fees charged for running company-controlled timeshares.

A little here & a little there . . . after a while it starts adding up, no ?

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

 

[Twinkstarr]

What's to keep'm from jacking up the price to join T.H.E. Club ?

Ditto annual club dues ?

Also, exchange fees ?

Not to mention higher sticker prices on full-freight BlueGreen & Diamond timeshares ?

In addition, possibly also raising management fees charged for running company-controlled timeshares.

A little here & a little there . . . after a while it starts adding up, no ?

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

They have to bring the bags of cash to the closing right? So they will have to probably take on some debt. Personally I'm not sure in this environment that DRI is going to be able to get this thing financed. Financial institutions of all kinds seem to be skittish about lending.

 

[CharlesS]

Buildings and Land

In addition to all of the valuable non-tangibles that Boca mentioned, there are tangibles. At many resorts, we, "the owners", own only our unit. The developer owns the golf course, the check-in building, the clubhouse, the pool, and, in a number of cases, land on which new timeshare units can be built.

Charles

If some particular BlueGreen timeshare is sold out, what it is it excactly that Diamond Timeshare Co. gets at that timeshare when it buys out BlueGreen ?

I mean, all the weeks & all the units at the sold-out timeshare are owned by regular walking-around people, with none remaining for the timeshare company to sell. So what's left there for some big timeshare company to take over via merger & acquisition & buyout ?

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​

 

[pgnewarkboy]

I fully understand the apprehension of blue green owners.I was apprehensive at first when Diamond bought Sunterra. A system I was with for many years. I am very happy with the acquisition by Diamond and feel that my timeshare experience has been signficantly improved. The reservations system is improved by phone and on the web. My calls and questions are answered promptly and satisfactorily. Diamond has increased the number of options I have to use my points. I entered time sharing for the unique experience that it brings. I think that Diamond has enhanced that experience. I am optimistic that if Blue Green is acquired by Diamond it will be of benefit to both groups.

A resort chain cannot be operated without fees. It is has been my experience, and I am sure the experience of all others, that fees go only in one direction - up. Unreasonable fees are constrained by the market place. If Diamond or Marriott or Hyatt embark on a series of unjustified hikes in fees they will surely hear from their members and eventually lose market share. I have no reason to believe these companies want to destroy their business operations.

 

[CharlesS]

BG Extends Exclusive Negotiating Period with Diamond

Bluegreen Corporation Agrees to Extend Exclusive Negotiating Period with Diamond Resorts International

http://phx.corporate-ir.net/phoenix.zhtml?c=112002&p=irol-newsArticle&ID=1197063&highlight=

Charles

 

[rapmarks]

charles, i saw the previous post in which you stated that, among other things, Bluegreen owns the check in building.
I had quite a discussion about this with our association president, as he thinks the HOA and POA own the check in building. Bluegreen stated that they were giving the building to the POA to run. Exactly who owns that building?

 

[CharlesS]

charles, i saw the previous post in which you stated that, among other things, Bluegreen owns the check in building.
I had quite a discussion about this with our association president, as he thinks the HOA and POA own the check in building. Bluegreen stated that they were giving the building to the POA to run. Exactly who owns that building?

Sorry if I misled you. I do not know who owns exactly what at CMV. My statement was a generality about what "owners and their HOA's" might own and what the "developer" might own.

Charles

 

[rapmarks]

I don't feel you misled me, I think the wording of what Bluegreen told us at the time of the assessment was misleading. Letting the HOA manage the building is different than letting them have the building. I just wish we could clarify it.

 

[CharlesS]

I just wish we could clarify it.

Generally, whoever owns the land owns the buildings on the land UNLESS there is some legal document saying that someone else owns the building. It seems like the head of the HOA should know what documentation they have. Of course, I also do not know who owns the land under the building.

Charles

 

[rapmarks]

I should just try to check the property tax records, but i am pretty sure that whole stretch of land is owned by bluegreen.