Vacasa Accepts Revised Acquisition Offer, Turns Down Rival's Higher Bid

Property management company Casago and investment firm Davidson Kempner Capital Management have submitted at least two bids each since late December to acquire Vacasa.

In the latest development, the Vacasa board announced Monday it accepted Casago's revised bid of $5.30 per share in cash. On March 14 in its own third bid, Davidson Kempner made a higher offer of $5.75 per share in cash.

But even though Davidson Kempner's bid was higher, a Vacasa special committee said there was a "superior certainty" that the Casago bid would get signed and closed.

“The decision to enhance our offer indicates our commitment to closing this transaction as quickly as possible," Casago President Joe Riley said in a statement Monday.

Behind the Competing Bids

One factor is that Davidson Kempner holds $30 million in senior secured convertible notes in Vacasa. If Davidson Kempner were to drag out the closing and Vacasa ran out of cash, then it could potentially take control of Vacasa on the cheap.

Davidson Kempner has the option to increase its position to $75 million if Vacasa issues additional notes.

Another point of contention in the Davidson Kempner bid is that it hinges on an amendment to Vacasa's Tax Receivable Agreement, and the investment firm hasn't been able to line up pre-IPO investors in Vacasa, who are beneficiaries of that pact, to agree to that amendment.

Casago Bid to Be Sent for Shareholder Approval

Vacasa said it is sending the board-approved Casago deal to shareholders for their approval, and hopes to close the acquisition by the end of April.

That does not preclude the potential for a new revised bid from Davidson Kempner in the interim.

Casago's first bid for Vacasa at $5.02 per share in cash landed in late December, followed by a Davidson Kempner bid February 3 for $5.25 per share. On March 3, Davidson Kempner revised its initial bid, decreasing a minimum liquidity threshold and offering interim financing to Vacasa. Its latest revised bid was on March 14, upping the offer to $5.75 per share.

Casago went public in a special purpose acquisition company merger in December 2021, and has been struggling ever since. It has been losing properties under management and has downsized repeatedly.

Note: This story has been updated to detail that Davidson Kempner made an initial bid for Vacasa and has revised it twice thereafter.