Stephen Weisz and The Strand Hotel at 33 West 37th Street (Credit: Marriott Vacations Worldwide and Loving New York)
Marriott Vacations Worldwide, the timeshare and vacation homes arm of Marriott International, is raising $750 million to fund its acquisition of rival ILG.
In April, the two firms agreed to a $4.7 billion stock and cash deal that is expected to create the largest luxury timeshare company in the world. If the deal closes, the combined firms will operate seven brands serving 650,000 owners.
Marriott is offering $750 million worth of senior notes that mature in 2026. The firm intends to use the proceeds from the offering, along with the funds from a new $900 million credit facility, to pay for the cash portion of the acquisition. For each of their shares, ILG stockholders will receive $14.75 in cash and 0.16 of a share of Marriott Vacations stock.
In an earnings call on Monday, Marriott Vacations president and CEO Steve Weisz called the deal a “clear win” for the shareholders of both companies. The combined companies will have 110 locations with a projected total revenue of $4 billion.
Before agreeing to the acquisition, activist investors had been pushing Miami-based ILG to strike a deal with a rival. Investment adviser FrontFour Capital, which owns a two percent stake in the company, sent a letter to the ILG board in May of last year, warning that it will review its options if the board declined a Marriott bid.
Mariott, through its brands Marriott Vacation Club, Ritz-Carlton Destination Club and Grand Residences by Marriott, operates 65 resorts. Last November, it purchased the Strand Hotel at 33 West 37th Street for $158.5 million.
The shareholders of both companies are scheduled to vote on the acquisition on Aug. 28. If the deal gains shareholder approval, it is expected to close on August 31.
Powered by WPeMatico