Bluegreens Intent to Sell Diamonds Intent to Buy

Bluegreens Intent to Sell Diamonds Intent to Buy August 5, 2008

Posted by Bryan Connelly in : ARDA, Bluegreen Resorts, Customer Comments, Donate a Timeshare, Fairfield Timeshares, General, New Features, News & Events, Timeshare Rental, Timeshare Resale, Travel , trackback

In the beginning weeks of July, Bluegreen Corporation had been examining the feasibility of selling itself to a new owner. Recently Diamond Resorts LLC had stepped up to the plate and proposed a nonbinding letter of intent to acquire Bluegreen at $15 a share, or about $500million. But the transaction is not complete yet, and Diamond’s ability to finance such an endeavor seems to be the only question mark in the way.

Alan B. Levan, chairman of Bluegreen Corp, stated the company had been considering options for the next three to five years. “…When Diamond presented our board with this unsolicited, attractive offer, we believed that it was in the best interest of our shareholders to pursue this transaction at this time.” Levan is also chairman and chief executive of Woodbridge Holdings Corp, which owns 9.5 million shares of Bluegreen stock; he indicated that Woodbridge would also back the proposed deal.

Bluegreen is a top brand that markets flexible real estate-based timeshares and vacation ownerships, they provide access to over 40 resorts as well as an exchange network of over 3,700 resorts, cruises and hotel stays. In recent quarters Bluegreen reported that revenues fell to $111.3million, due to weaker home-site sales—their net income also slipped to $1.4million from $5.3million this time last year.

Owners of Bluegreen points may be facing some of the same issues Sunterra owners ran into after April of 2007 when Diamond Resorts bought the timeshare heavyweight for about $750million. Though current Bluegreen owners will gain access to Diamond properties, they will probably be required to upgrade their points to Diamond points—for a nominal fee of course. Diamond has been buying up rivals to become one of the world’s largest vacation ownership companies. It now boasts 110 branded and affiliated resorts in 14countries in the Americas, Hawaii and Europe, with more than 360,000 owners.

Even though vacation ownership and residential sales have dropped considerably (28.4%) at Starwood Hotels & Resorts Worldwide, one of Bluegreen’s main competitors, Diamond is proceeding with extensive due diligence until early September 2008 to buy Bluegreen. This will allow Diamond to investigate the details of the potential investment, such as examinations of operations and management.

Though the letter of intent stated the acquisition is subject to the completion of due diligence and the execution of definitive agreements, Diamond said it was “confident that it will be able to raise the financing necessary to consummate the proposed transaction.” This may be a wise purchase for Diamond, since the timeshare industry has been a steady force during tough economic times—however; financing continues to be the biggest question mark surrounding the deal.

BuyATimeshare.com, the leading timeshare resale company in the world, is closely following the progress of this transaction. We have an extensive inventory of Bluegreen and Diamond properties for sale and rent, priced thousands of dollars less than developers will. If you are interested in buying a timeshare at any brand resort, BuyATimeshare.com can help; will no broker fees, no commission or appraisal fees, and absolutely no sales pressure!