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MarketScreener Homepage  >  Equities  >  Nasdaq  >  ILG Llc    ILG

ILG LLC

(ILG)
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Marriott Vacations buys ILG in $4.7 billion timeshare merger

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04/30/2018 | 12:24pm EST

(Reuters) - Marriott Vacations Worldwide Corp will buy timeshare operator ILG Inc for $4.7 billion (3.4 billion pounds), the companies said on Monday, grabbing the chance to merge operations and brands spun out of Starwood and Marriott hotels.

(Reuters) - Marriott Vacations Worldwide Corp will buy timeshare operator ILG Inc for $4.7 billion (3.4 billion pounds), the companies said on Monday, grabbing the chance to merge operations and brands spun out of Starwood and Marriott hotels.

ILG serves some 2 million members through various networks and has faced pressure from investor FrontFour Capital Group, which has been urging a sale to cash in at a time when U.S. stock valuations are high and global travel demand is booming.

The combined company will have 108 properties and seven upscale brands including ILG's Hyatt, Westin and Sheraton vacation ownership brands, giving it more scale to compete with Hilton Grand Vacations Inc and Bluegreen Vacations Corp.

ILG's stock rose about 5 percent on the news of the deal, while Marriott Vacations — paying $14.75 in cash and 0.165 of its own shares for each ILG share — slid 9.2 percent.

"With the combination of the hotel groups – Starwood and Marriott – it only makes sense for the timeshares that operate those brands to merge," Oppenheimer analyst Ian Zaffino said, adding that "timeshare growth is solid."

Hotel chain Marriott International Inc bought Starwood Hotels & Resorts Worldwide Inc about two years ago in a $12 billion deal, months after Starwood spun off its timeshare business and merged it with ILG. Marriott spun off its timeshare business in 2011.

Marriott Vacations' deal for ILG comes as the timeshare industry seeks to improve occupancy rates and shed its image of locking customers into complex contracts, in the hope of becoming a more popular holiday option for many vacationers.

The merger is expected to add to Marriott's earnings and save at least $75 million in costs.

"We see potential growth from the enhanced marketing capabilities across the expanded portfolio and owner and guest network that we will have post closing," Marriott Vacations Chief Executive Officer Stephen Weisz said on a conference call with analysts.

Marriott's board of directors will be expanded to include two members from ILG's board.

According to Reuters' calculations, the deal price represents a nearly 19 percent premium to ILG's closing price on April 13, the day before Reuters reported that the two companies were in advanced talks for a deal.

JPMorgan was Marriott's exclusive financial adviser, while Goldman Sachs and Moelis & Co advised ILG.

(Reporting by Arunima Banerjee in Bengaluru; Editing by Saumyadeb Chakrabarty and Sai Sachin Ravikumar)

By Arunima Banerjee

Stocks mentioned in the article
ChangeLast1st jan.
BLUEGREEN VACATIONS CORPORATION -1.43% 9.63 Delayed Quote.-25.52%
GOLDMAN SACHS GROUP INC. 0.56% 217.14 Delayed Quote.29.99%
HILTON WORLDWIDE HOLDINGS INC. 1.99% 34.9 Delayed Quote.32.25%
ILG LLC 0.00%End-of-day quote.19.84%
MARRIOTT INTERNATIONAL 0.75% 140.3 Delayed Quote.29.24%
MARRIOTT VACATIONS WORLDWIDE CORPORATION 0.49% 123.73 Delayed Quote.75.48%
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Managers
NameTitle
Craig M. Nash Chairman, President & Chief Executive Officer
William Loucks Harvey Chief Financial Officer & Executive Vice President
Marie A. Lee Chief Information Officer
David J. A. Flowers Independent Director
Lewis J. Korman Independent Director
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