Introducing HGV Max — Our New Membership Program (Official announcement from HGVC)

[escanoe]

HGV has a huge majority shareholder (Apollo) that is really there for just return on investment.

This is concerning news to me. When did Apollo become a majority shareholder?

According to reporting at the time the deal went down, the HGVC owners previous to the merger retained 72% of ownership.

The required ownership threshold for Apollo (and other DRI investors) to control two board seats was 15%

"Upon closing, Hilton Grand Vacations' management team will continue in their current roles and the company's board will be upsized to nine members from seven. The selling shareholders will have the right to appoint two directors as long as their equity ownership in the company remains at or above 15% of the outstanding stock at closing and one director as long as their equity ownership remains at or above 10%."

I have no doubt Apollo has a lot of leverage in this (and it is about making money for everyone) ... but if Apollo now owns a majority this really was DRI taking over HGVC.

 

[CalGalTraveler]

I am not aware that Apollo has increased their position in HGV beyond the acquisition shares (approx 27%) and 2 out of 9 board seats. Although they are in a position to significantly influence, they don't hold a majority of shares to change votes. YMMV...This is not my wheelhouse so will defer to others that have been tracking this activity more closely.

If the Apollo Diamond stake has increased, that is cause for concern. Based on the high MF for the mediocre quality of the resorts, it is clear DRI was not well managed.

 

[tk25]

A list of shareholders for Hilton Grand Vacations.
HGV Major Holders
Currency in USD
Breakdown

0.82%	% of Shares Held by All Insider
98.21%	% of Shares Held by Institutions
99.02%	% of Float Held by Institutions
308	Number of Institutions Holding Shares

Top Institutional Holders

Holder	Shares	Date Reported	% Out	Value
Apollo Management Holdings, L.p.	30,295,825	Dec 30, 2021	25.22%	1,578,715,440
Vanguard Group, Inc. (The)	8,266,546	Dec 30, 2021	6.88%	430,769,712
Capital International Investors	7,909,060	Dec 30, 2021	6.58%	412,141,116
CAS Investment Partners, LLC	7,727,165	Dec 30, 2021	6.43%	402,662,568
Blackrock Inc.	7,381,558	Dec 30, 2021	6.14%	384,652,987
AllianceBernstein, L.P.	5,421,050	Dec 30, 2021	4.51%	282,490,915
Parsifal Capital Management, LP	4,702,755	Dec 30, 2021	3.91%	245,060,563
FMR, LLC	4,594,816	Dec 30, 2021	3.82%	239,435,861
North Peak Capital Management, LLC	3,796,699	Dec 30, 2021	3.16%	197,845,984
Franklin Resources, Inc.	2,987,798	Dec 30, 2021	2.49%	155,694,153

Top Mutual Fund Holders

Holder	Shares	Date Reported	% Out	Value
New Perspective Fund Inc	5,440,146	Dec 30, 2021	4.53%	283,486,008
Vanguard Total Stock Market Index Fund	2,554,554	Dec 30, 2021	2.13%	133,117,808
Vanguard Small-Cap Index Fund	2,261,866	Dec 30, 2021	1.88%	117,865,837
iShares Russell 2000 ETF	1,957,553	Jan 30, 2022	1.63%	95,646,039
Franklin Value Investors Trust-Franklin Small Cap Value	1,848,291	Jan 30, 2022	1.54%	90,307,498
AB Cap Fd.-AB Small Cap Growth Port	1,780,538	Jan 30, 2022	1.48%	86,997,086
Smallcap World Fund	1,744,923	Dec 30, 2021	1.45%	90,927,937
Vanguard Small-Cap Growth Index Fund	1,408,339	Dec 30, 2021	1.17%	73,388,545
Vanguard Extended Market Index Fund	1,167,116	Dec 30, 2021	0.97%	60,818,414
Fidelity Small Cap Value Fund	985,000	Jan 30, 2022	0.82%	48,127,100

People Also Watch

Symbol	Last Price	Change	% Change
VAC Marriott Vacations Worldwide Corporation	150.55	-4.24	-2.74%
WH Wyndham Hotels & Resorts, Inc.	86.99	-2.61	-2.91%
PK Park Hotels & Resorts Inc.	19.43	-0.34	-1.72%
H Hyatt Hotels Corporation	94.81	-2.25	-2.32%
CHH Choice Hotels International, Inc.	141.21	-3.33	-2.30%

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BALY Bally's Corporation	28.98	-0.66	-2.23%
MCRI Monarch Casino & Resort, Inc.	72.44	-2.57	-3.43%
GDEN Golden Entertainment, Inc.	49.34	-1.75	-3.43%

 

[dayooper]

I am not aware that Apollo has increased their position in HGV beyond the acquisition shares (approx 27%) and 2 out of 9 board seats. Although they are in a position to significantly influence, they don't hold a majority of shares to change votes. YMMV...This is not my wheelhouse so will defer to others that have been tracking this activity more closely.

If the Apollo Diamond stake has increased, that is cause for concern. Based on the high MF for the mediocre quality of the resorts, it is clear DRI was not well managed.

Apollo owns more stock in HGV than any other entity outside of HGV itself.

 

[HuskerATL]

From the FB group.

 

[escanoe]

Apollo owns more stock in HGV than any other entity outside of HGV itself.

Noted. It is the largest investor, and I think @dioxide45 likely meant it was a major owner/stockholder vs “majority.”

As Mark Twain said the difference between the right word and the almost right word can be as big as the difference between lightening and the lightning bug.

I don’t always state everything right on here, for sure.

 

[90_Min_Sales_Pitch]

I'm going to try to be optimistic here. If HGVC and DRI were of equal value, wouldn't Apollo own 50% of the shares? To make matters worse, HGVC only owned 62 resorts, compared to Diamond's 92. I can't imagine that the board, possibly even Apollo itself, thinks DRI's model was the path to success. We also have two fundamentally different models: building your own resorts, vs acquisitions of distressed properties.

 

[escanoe]

I would say it was a complex financial transaction. There is a lot of debt involved on the part of both companies. “Ownership” of the properties within the system is fairly complicated as well.

Hilton Grand Vacations to Acquire Diamond Resorts, Creating the Premier Leisure Operator With the Broadest Offering in the Vacation Ownership Industry

HILTON GRAND VACATIONS TO ACQUIRE DIAMOND RESORTS, CREATING THE PREMIER LEISURE OPERATOR WITH THE BROADEST OFFERING IN THE VACATION OWNERSHIP INDUSTRY

www.businesswire.com

Under the terms of the agreement, the Apollo Funds and the other Diamond stockholders, including the Reverence Funds, are expected to receive 34.5 million shares of HGV common stock, valued at approximately $1.4 billion, subject to customary adjustments. Upon transaction close, existing HGV shareholders will own approximately 72% of the combined company and the Apollo Funds will own approximately 28% of the combined company.

I'm going to try to be optimistic here. If HGVC and DRI were of equal value, wouldn't Apollo own 50% of the shares? To make matters worse, HGVC only owned 62 resorts, compared to Diamond's 92. I can't imagine that the board, possibly even Apollo itself, thinks DRI's model was the path to success. We also have two fundamentally different models: building your own resorts, vs acquisitions of distressed properties.

 

[tombanjo]

Hmm. I didn’t see my name listed and I own a share.

The Apollo model I think is to borrow huge amounts of money, soak cash out, flip. I think COVID screwed up their plans and HGV was a chance to still get something out of it.

the easiest way to expand a business is to buy another. So HGV adds a lot to their portfolio and massively expands customer base.

it does make them vulnerable if they take a very valuable asset, loyal customers, and piss them off. Their primary market is owners, and if they lose that, it will be very difficult to get them back.

 

[CalGalTraveler]

it does make them vulnerable if they take a very valuable asset, loyal customers, and piss them off. Their primary market is owners, and if they lose that, it will be very difficult to get them back.

I wholeheartedly agree. I do not think DRI ever understood that.

HGV has loyal customers but they are in a danger zone right now with their loyal base with how they are handling the Max rollout. Especially by not recognizing Elites and retail buyers who have spent thousands on their program.

MVC understands this. They are recognizing prior retail sales with their programs. They cited in a financial disclosure that the majority of their sales are to their existing base. The maxim it takes 7x effort and cost to acquire a new customer than to keep an old one applies.

 

[dioxide45]

Noted. It is the largest investor, and I think @dioxide45 likely meant it was a major owner/stockholder vs “majority.”

As Mark Twain said the difference between the right word and the almost right word can be as big as the difference between lightening and the lightning bug.

I don’t always state everything right on here, for sure.

Yeah, I probably misspoke there. Didn't mean to indicate they hold a majority of the shares, just that they are the largest shareholder. Don't they also hold several board seats?

 

[dayooper]

Yeah, I probably misspoke there. Didn't mean to indicate they hold a majority of the shares, just that they are the largest shareholder. Don't they also hold several board seats?

Part of the purchase agreement was HGV would increase their board by 2 and they would be filled by Apollo. It will stay this way as long as Apollo keeps a certain percentage of stock.

 

[escanoe]

That is right. The details of that are in post 401 on this thread.

Above 15%, they keep 2 on the board.

Above 10%, they keep 1.

Part of the purchase agreement was HGV would increase their board by 2 and they would be filled by Apollo. It will stay this way as long as Apollo keeps a certain percentage of stock.

 

[McIma]

Yes, $7K for HGVC members with retail deed(s) to join.

I don't see anywhere that gives you the option for current HGVC Members to "buy in" to HGV Max for $7,000 without buying more points. Back at the beginning of the year, I asked for "more information" and the rep that called me said that the only way for a current HGVC member to get access to HGV Max properties was to buy more points after the launch. Has that changed?

 

[GT75]

I don't see anywhere that gives you the option for current HGVC Members to "buy in" to HGV Max for $7,000 without buying more points. Back at the beginning of the year, I asked for "more information" and the rep that called me said that the only way for a current HGVC member to get access to HGV Max properties was to buy more points after the launch. Has that changed?

That is in the information posted originally from HGV for Max program, however, it hasn't (maybe it won't) been implemented (yet).

 

[escanoe]

That is in the information posted originally from HGV for Max program, however, it hasn't (maybe it won't) been implemented (yet).

My bet is after they finish selling more points (or deeds tied to points) to everyone willing to buy them they will then see if there are any customers/suckers left willing to pay $7k to get into MAX. I am a bit eager to see what is going to be in the club rules/manual/guide for 2023.

 

[pedro47]

My bet is after they finish selling more points (or deeds tied to points) to everyone willing to buy them they will then see if there are any customers/suckers left willing to pay $7k to get into MAX. I am a bit eager to see what is going to be in the club rules/manual/guide for 2023.

The rules will not change until 2024.IMO.

 

[Eggrollcreative]

Three weeks ago we upgraded to HGV Max and waiting for the website to update. The “ultimate access” was presented to us as one of the benefits of our upgrade. After a Kerfuffle it appears to be a substitute for the bribes they give us to attend those lying sales presentations?! I’m really upset. I went online and found multiples places where they present this as a new benefit of ownership and one where it specifically indicates it’s a benefit of HGV Max membership. Meanwhile I found in the bowels of their website and confirmed it with Barbie the VP at the concert last night that it is specifically for the folks who attend the update. Due to our upgrade three weeks ago we didn’t qualify… waiting two days for a call back from Guest Services. Waited two days for guy who upgraded us to try to brush us off. The marketing gal is super sweet and fave is HER tickets…still waiting for additional two outings they promised, third day. No way to order them as implied. What a mess this company appears to be.

Today is January 18, 2023 and it appears our sales rep sincerely believed this was part of our HGV Max upgrade. Yikes.

 

[HuskerATL]

There is nothing for free. This is just another way to get folks into sales meetings. If you go to one, you are required to attend a sales meeting.

They can be decent but just know what they are.

 

[Talent312]

With Max, not even sales-weasels knew (know) the nuts & bolts.
So they make it up, and presentation marks believe what they say.

It's like buying a car:
The sales-creeps can show you how bright & shiny it is, but
if you want the specs, you'd better research it yourself, first.
.