ILG Inc (NASDAQ: ILG) is having a strong start to the trading session this morning after announcing that it would be acquired by Marriott Vacations Worldwide (NYSE: VAC). Of course, the news led to excitement among investors who are sending the stock screaming for the top. Today, we’ll talk about:
- The acquisition;
- what we’re seeing from ILG as a result;
- and what we’ll be watching for ahead.
ILG Announces Acquisition
As mentioned above, ILG is having an incredibly strong start to the trading session this morning after announcing that it would be acquired. In a press release issued early this morning, the company announced that it would be acquired by Marriott Vacations Worldwide (VAC). In the release, the company said that Marriott will acquire all outstanding shares of ILG in a cash and stock transaction with a value of approximately $4.7 billion. According to the terms of the agreement, VAC will pay $14.75 in cash and 0.165 shares of its common stock for each share of ILG acquired. In a statement, Stephen P. Weisz, President and CEO at VAC, had the following to offer:
This transaction will combine two of the premier global vacation ownership companies to create a more diversified company with significantly enhanced marketing potential and scale to drive sales growth and value for both MVW and ILG shareholders…With ILG, we will bring together six world-class vacation ownership brands under one licensing relationship with Marriott International, which will enable us to leverage high-value marketing and sales channels, including those provided by Marriott International’s platforms, and enhance the benefits of our access to Marriott International’s loyalty programs, call transfer and hotel linkage programs. We will also diversify our vacation ownership business with the addition of the Hyatt Vacation Ownership platform, providing exciting growth opportunities outside of the Marriott and Vistana platforms. Additionally, with ILG’s leading exchange networks, we will gain recurring, high-margin revenue streams.
ILG shares our dedication to customers and commitment to creating an unparalleled vacation experience for our Owners. Together, I am confident that we will be better positioned to fulfill the dreams of Owners, Members and guests around the world by providing them with memories that will last a lifetime.
The above statement was followed up by Craig M. Nash, Chairman, President and CEO at ILG. Here’s what he had to offer:
We are very pleased to achieve this outcome for shareholders, as it provides them with immediate and compelling cash value and the opportunity to meaningfully participate in the long-term growth potential of a powerful combined company… The strategic rationale for this transaction is clear. Combining these two highly complementary businesses will create an industry leader with enhanced scale and a broader product portfolio that will have great benefits for our members, owners and guests. Thanks to the dedication and hard work of our more than 10,000 talented associates around the world, we have been able to successfully adapt to changing industry dynamics throughout our history, and this transaction is another step in that evolution. MVW associates share the same values and goals that we have championed for so long, and we are confident that MVW and ILG are as strong a cultural fit as they are strategic.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news causes moves. In this particular case, the news proved to be overwhelmingly positive. After all, the acquisition is happening at a premium. So, it’s no surprise to see that investors are excited. As is almost always the case, our partners at Trade Ideas were the first to alert us to the gains. At the moment (10:59), ILG is trading at $34.38 per share after a gain of $1.73 per share or 5.30% thus far today.
Stop wasting your time! Start finding winning trades in minutes with Trade Ideas!
What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on ILG. In particular, we’re interested in following the news surrounding the acquisition. While the transaction has been approved by the Boards of Directors at both companies, it is still subject to regulatory approval as well as customary closing conditions. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
Never Miss The News Again
Do you want real-time, actionable news delivered to your inbox? Join the CNA Finance mailing list below!