Hilton Grand Vacations (HGV) to be acquired by Apollo Global (APO) ?

Apollo Global (APO) aiming to purchase HGV for as high as $36/share according to NY Post

Besides Apollo, Blackstone Group (BX - Get Report) also could also be a suitor for Hilton Grand Vacations, sources told the Post.

Apollo Global Management has told time-share operator Hilton Grand Vacations it wants to buy the $2.4 billion outfit, and the company is considering its next steps, The Post has learned.

Apollo, co-run by Leon Black, gave the Orlando time-share company three options: It could buy Hilton Grand at a premium to its share price, merge the company with smaller Apollo-owned rival Diamond Resorts and keep the combined business public, or tender for Hilton Grand shares at a premium to the current Hilton Grand share price, sources said.

Apollo has not indicated what it would pay, but sources said the private equity firm could bid as much as $36 a share — a 28% premium over the company’s closing price Monday of $28.21 a share.

Hilton on Aug. 1 reported disappointing earnings, and its shares are down more than 10% this month, giving suitors a chance to potentially buy it on a dip.

Apollo’s Black wants to combine Diamond Resorts, which it bought in September 2016, with Hilton Grand so it can cut costs and gain scale, sources said.

The CFO of Diamond, Jim Mikolaichik, was Hilton Grand’s CFO until last year.

Besides Apollo, the Blackstone Group could also be a suitor, sources said.

Hilton Worldwide Holdings, which Blackstone once controlled, spun off Hilton Grand in 2017. Blackstone then formed a joint venture with Hilton Grand to buy Elara, one of the world’s largest time-share resorts.

Blackstone President Jonathan Gray is still chair of Hilton Worldwide and licenses its name to Hilton Grand.

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Hilton (HLT) spinoffs go live, start trading Wed 1/4/17

Nearly 10 months after announcing plans to spin off its real estate and timeshare businesses, Hilton Worldwide Holdings Inc. (NYSE: HLT) is expected to officially split into three Tuesday.

The transaction will create two new public companies: a real estate investment trust called Park Hotels & Resorts and the timeshare business Hilton Grand Vacations. Shares of both will begin trading Wednesday morning on the New York Stock Exchange. Park will use the ticker “PK” and Hilton Grand Vacations “HGV.”

 

 

Executives and guests of Hilton Grand Vacations (NYSE:HGV) visit the New York Stock Exchange (NYSE) to celebrate their spin-off from Hilton (NYSE:HLT). To mark the occasion President and Chief Executive Officer of Hilton Grand Vacations, Mark Wang, rings the Opening Bell. (Photo Credit: NYSE)

Hilton's board approved the transaction, including a one-for-three stock split, Dec. 5. The split will reduce the number of shares of Hilton stock from 990 million to 330 million; Hilton shareholders will get two shares of Park common stock and one share of Grand Vacations stock for every 10 shares of Hilton stock they own.

The move comes as Hilton takes on a much larger competitor in Marriott International Inc. (NASDAQ: MAR), which completed its merger with Starwood Hotels & Resorts in September. Hilton has about 300,000 rooms in its pipeline and a total of 789,000 rooms open. Marriott has 420,000 rooms in its pipeline and more than 1.1 million rooms open.

Park Hotels & Resorts is taking 69 properties off of Hilton’s hands, including the Hilton McLean Tysons Corner next to Hilton’s headquarters.