Bluegreen Corporation Signs Non-Binding Letter of Intent to Sell Company to Diamond R

[vintner]

Originally Posted by Spence

Sunterra doesn't exist, Sunterra has no debt. All obligations were taken over by private company DRI and you don't know what their financing is, that's the joy of a private company.

That is kind of a fine line in definition.

Sunterra had debt. Sunterra was bought by DRI and so DRI is paying the debt incurred by Sunterra. While you may say that Sunterra has no debt, I would say the Sunterra debt has been transferred to DRI. It is more of an accounting issue, debt is still a debt, even if you put a different name on it.

Again, fine line in how this may be defined, but the debt that was transferred is real. We just don’t know the status of the debt.

And that whole post I just did probably has no meaning at all, but when have I been known to just keep quiet?

[Aashlee]

That's what I thought, Vintner, unless Sunterra defaulted on all its loans and DRI was allowed to buy Sunterra debt-free. But what judge would allow that?

Somehow not knowing DRI's financing doesn't make me feel any better. It's that whole "fear of the unknown" thing. I'd like to know how these people do business.

[BocaBum99]

Our imaginations are always better than reality. At this point, we don't know what this means for Bluegreen Owners. So, worrying at this point just gives us ulcers.

In fact, we don't even know if a deal will be consummated. It is a non-binding letter of intent for a price with no terms. And, the seller has the right to find other buyers. Very bizzare situation. Whenever I have been involved in big deals, we always stayed away from letters of intent because it took as long to negotiate those as it did the actual deals. It sounds like a pretty good, "we are for sale" press release.

What is fundamentally different this time from when David Siegel was attempting a hostile takeover of Bluegreen, the Bluegreen board was against it. This time they are supporting it, so it has a much better chance of success.

If another potential suitor comes to the table, this could get really interesting.

[aussiegirl]

So I took advantage of their recent buyback offer and sold my Polo Towers week back to DRI and am waiting for my check.

And I am waiting for the last paperwork from BG to requalify me for gold status (thanks Jim!)

And now I learn that there is a good chance that I will soon be a gold member with DRI

I am getting too old for this......

Ann

[SteveChapin]

I realize I'm in the small, small minority, but as a non-BG Points, CMV UDI owner, I'm leery about what this means to the value of my ownerships. I don't think DRI can get rid of my UDI, but who knows what will happen with fees.

Well, ok, I know: they'll go up. But by how much?

sc
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[aussiegirl]

Originally Posted by BocaBum99

Our imaginations are always better than reality. At this point, we don't know what this means for Bluegreen Owners. So, worrying at this point just gives us ulcers.

Very true. I just sooooo hope that the things we love about BG will somehow be preserved. And I am very glad that I bought points at the resorts that I use as I think that home resort priority will be the most difficult benefit to mess with.

Ann

[swirg53]

Originally Posted by Spence

... DRI and you don't know what their financing is, that's the joy of a private company.

It seems to me that all major companies have debt. It's part of doing business. BG "just" announced some new financing partnerships, in fact. I don't remember the fancy lingo associated with that but if you have financing and you use it and you owe the financier, then you are in debt.

Now you can be a loser corporation and be in debt or you can be a winning corporation and be in debt.

Since you mentioned DRI being a private company, does that mean they do not have (public) shareholders like BG does? I'm very not in tune to stock market kind of things. I should be; but I spend too much time in the timeshare market kind of things. Maybe that will be on haitus pretty soon!

[tonyg]

Originally Posted by swirg53

It seems to me that all major companies have debt. It's part of doing business. BG "just" announced some new financing partnerships, in fact. I don't remember the fancy lingo associated with that but if you have financing and you use it and you owe the financier, then you are in debt.

Now you can be a loser corporation and be in debt or you can be a winning corporation and be in debt.

Since you mentioned DRI being a private company, does that mean they do not have (public) shareholders like BG does? I'm very not in tune to stock market kind of things. I should be; but I spend too much time in the timeshare market kind of things. Maybe that will be on haitus pretty soon!

Debt is not necessarily a bad thing, however excessive debt is a bad thing. Many years ago when a friend was thinking of buying Sunterra, I took a look at their balance sheet which had an excessive amount of debt. I told him not to buy and he didn't. Within a year there was bankruptcy. To build or buy timeshares, a company needs money and usually will borrow to get that money. When the ability to repay becomes questionable- money will not be lent. These are tough credit times and I doubt if DRI has enough cash to buy an outfit like Bluegreen outright and that may just end the story. I doubt if Bluegreen's board will be interested in a cash and stock deal. Maybe Seagull will come back with a juicy offer, or maybe this will just fade away.
Sunterra got into trouble buying up everything it could and growing it's debt--looks like a new name may not change the game. Then again, who knows how deep the private pockets are ? One thing they are doing right is buying back their timeshares on the cheap (a lot cheaper than they could build) and selling them for a huge profit. The owners of DRI may be a small group of investors, while Bluegreen may have multi-thousands of smaller owning investors.

[GeckoSnow]

There are some interesting facts in the press release... 1. The statement that the board was presented the offer-lends me to believe that the board has already voted to accept it. 2. BXG is leaving the door open to additional suitors-so it is very likely that BXG will be sold to someone. 3. The Price. I mean really 133% over previous stock close seems kind of insane to me. Also-the price is 'exclusive' of debt-meaning that it could be much higher in the end. This I think it is the only way this doesn't get done depending on what that debt total is.

Some more speculation:

The Exchange company component. How much of DRI's private investors might be made up of II executives or some part of IAC? I wonder when BXG's affiliation agreement with RCI runs out? This would be a huge blow to RCI to lose the BXG owner/member base and a major feather in the cap at II to get them.

And the Select Connections-If the DRI deal does get done, that would make Select Connections Dual Affiliated (assuming that DRI moves BXG to II) which is a very interesting prospect.

Anyway-just some idle thoughts with no basis in reality (like most of my idle thoughts).

[Maggie]

I would personally love it if DRI would move BG to II. I am not at all happy with RCI. I have two RCI memberships one through Wyndham and one through BG. I have a week on deposit through both of these but the BG deposit was for a specific oceanfront 2 bedroom unit which was snapped up within 24 hours of being deposited. My exchange draws nothing that I have asked for. My Wyndham deposit was put in actually after the points expired but they managed to extend the 2007 usuage points to a week good until 2009. This exchange draws great weeks. RCI does not treat Bluegreen owners very well.