Why Hilton Grand Vacations Upped the Bid in $1.4 Billion Timeshare Takeover

After watching their stock price fall 68 percent from just mid-February to mid-March 2020, the leaders at Hilton Grand Vacations began talks two months later with another timeshare company, Diamond Resorts, about an acquisition. The agreed-upon sales price shows how the travel industry sees much of its future tied to branded properties coming out of the pandemic. The Hilton Grand Vacations team initially floated the idea last October of an all-stock acquisition of Diamond Resorts at an equity value of $840 million, according to a recent filing with the U.S. Securities and Exchange Commission. By the time a deal was announced last month, Diamond was slated to sell for $1.4 billion — a hefty climb considering the travel industry was still in tumult and wasn’t wearing the rose-colored glasses it appears to have slipped on in recent weeks. Hilton Grand Vacations was willing to play ball based on branding potential it sees lacking in the timeshare space. That has ramifications that will flow beyond timeshares and into all-inclusive resorts and other hotel sectors. Bloating Brands: Hilton Grand Vacations spun out from the Hilton Worldwide Holdings hotel company in 2017, but it remains an affiliated Hilton brand. The hotel company ultimately had to grant approval for the acquisition to move forward. Shifts in consumer behavior, or at least how hotel companies perceive them, made this approval a no-brainer. The 110-property Diamond Resorts portfolio isn’t affiliated with any brands, presenting a significant growth opportunity for Hilton. Hilton Grand Vacations even plans to create a new upscale sub-brand with the Diamond properties. The brand additions will add “significant credibility and enhance the value” of Diamond’s portfolio, according to the filing. The acquisition comes at a time when all major hotel companies are trying to absorb independent hotels and resorts into their branded portfolios across a variety of hospitality sectors like timeshares, all-inclusive resorts, and