News Release: DRI doesn't have financing for Bluegreen Tranaction

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

Bluegreen Corporation Updates Status of Proposed Transaction with Diamond Resorts International
BOCA RATON, Fla.--(BUSINESS WIRE)--

Bluegreen Corporation (NYSE: BXG) ("Bluegreen"), a leading provider of Colorful Places to Live and Play(R), announced today that representatives of Diamond Resorts International ("Diamond Resorts") have advised Bluegreen that to date Diamond Resorts has not secured financing sources for its previously announced proposed purchase of Bluegreen. On September 15, 2008 Bluegreen announced an extension until November 15, 2008 of the period during which Diamond Resorts would have an exclusive right of negotiation to acquire all of the Bluegreen common stock. While the credit markets remain extremely problematic, Diamond Resorts has requested that the exclusivity agreement remain in place pursuant to its previously disclosed terms. Diamond Resorts has indicated that it may propose an alternative transaction but there is no assurance that Diamond Resorts will make any alternative proposal or that, if made, any such proposal will be acceptable to Bluegreen.

[tonyg Goomba & Super Moderator Find all posts View Profile Close tonyg]

No big surprise- who wants to loan money to 2 time losers.

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

No big surprise- who wants to loan money to 2 time losers.

Usually, it's one time losers who don't know any better.

[BoardGirl Senior Member Find all posts View Profile Close BoardGirl]

Usually, it's one time losers who don't know any better.

LOL

[timeos2 Senior Member Find all posts View Profile Close timeos2]

Trouble in Bluegreen land

Bluegreen is starting to sound like the "new Sunterra". Under fire for illegal marketing, underfunded, looking to be bought out and laying off employees by the hundreds. Doesn't sound good. Like Sunterra before they disappeared into Diamond Resorts this is a group I would avoid right now.

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

Bluegreen is starting to sound like the "new Sunterra". Under fire for illegal marketing, underfunded, looking to be bought out and laying off employees by the hundreds. Doesn't sound good. Like Sunterra before they disappeared into Diamond Resorts this is a group I would avoid right now.

Bluegreen is nothing like the old Sunterra. That's like saying Scarlett Johansson and Phyllis Diller are the same because they are both blond women with all the same body parts.

What do you mean avoiding Bluegreen? Bluegreen is one of the most honest Timeshare Developers out there. The Bluegreen Vacation Club is a separate corporate entity that is funded by owner maintenance fees and is solid as a rock.

Bluegreen's sales and marketing programs are the same as all other resort developers.

In case you haven't noticed, many resort developers are having great difficulty in this economic environment including Wyndham, Westgate, Marriott and others I'm sure.

[Spence Super Moderator Find all posts View Profile Close Spence]

Maybe DRI should have been buying at $3.37 or anything under $4.

[timeos2 Senior Member Find all posts View Profile Close timeos2]

Bluegreen is nothing like the old Sunterra. That's like saying Scarlett Johansson and Phyllis Diller are the same because they are both blond women with all the same body parts.

What do you mean avoiding Bluegreen? Bluegreen is one of the most honest Timeshare Developers out there. The Bluegreen Vacation Club is a separate corporate entity that is funded by owner maintenance fees and is solid as a rock.

Bluegreen's sales and marketing programs are the same as all other resort developers.

In case you haven't noticed, many resort developers are having great difficulty in this economic environment including Wyndham, Westgate, Marriott and others I'm sure.

But the Bluegreen problems predated the current crunch. That may make it that much worse for Bluegreen than the others. Sunterra also had the "trust" type ownership supposedly under owner control and separate from the Developer but in reality it is totally under developer control but with the members paying the bills. That is very obvious now that Diamond is running that show. Bluegreen appears to be a very similar setup - in fact one Diamond is (was?) trying to buy. That type of operation makes me very nervous be it DVC, Bluegreen "THE CLUB" or any other trust operation that really gives zero control to buyers. The developers love it because they really hold all the cards. Others like VI also seem to be struggling now so it isn't specific to a brand but a general problem with the model IMO. Independent timeshare resorts with deeded owners don't depend on ongoing sales to operate. The "trust" type operations seem to be based not just on ongoing operations but new sales as well. They are much more vulnerable in downswings like we are experiencing now. If they were truly operations based they wouldn't be affected by sales slumps as almost all of them seem to be.

[BoardGirl Senior Member Find all posts View Profile Close BoardGirl]

But Bluegreen has more operations than just the Vacation Club. They are also in residential development so their exposure as an entity is deeper into real estate than a regular timeshare system. I believe this actually makes them stronger over the long haul than the others.

I'm not ditching them; others are free to avoid them. I like the management, I like that they keep expanding in desirable ways, I like that they value the owners, I like their sense of fiscal responsibility.

I'm not sure they went "looking to get acquired", but, honestly, I wasn't paying that much attention. Most good business people are always on the lookout for attractive opportunities. We don't know what we don't know, so it's quite possible that Bluegreen has considered entertaining other pairings where they are the acquirer.

Anything is possible.

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

But the Bluegreen problems predated the current crunch. That may make it that much worse for Bluegreen than the others. Sunterra also had the "trust" type ownership supposedly under owner control and separate from the Developer but in reality it is totally under developer control but with the members paying the bills. That is very obvious now that Diamond is running that show. Bluegreen appears to be a very similar setup - in fact one Diamond is (was?) trying to buy. That type of operation makes me very nervous be it DVC, Bluegreen "THE CLUB" or any other trust operation that really gives zero control to buyers. The developers love it because they really hold all the cards. Others like VI also seem to be struggling now so it isn't specific to a brand but a general problem with the model IMO. Independent timeshare resorts with deeded owners don't depend on ongoing sales to operate. The "trust" type operations seem to be based not just on ongoing operations but new sales as well. They are much more vulnerable in downswings like we are experiencing now. If they were truly operations based they wouldn't be affected by sales slumps as almost all of them seem to be.

You are clueless about how the Bluegreen Trust works. Your theoretical understanding is trivial at best. I know it in detail. It is far less vulnerable to downswings because the maintenance fees pay for the operations and it is broadly spread across dozens of resorts. There are maintenance fees which are required to run the standalone resorts. And, there is a $129/year annual dues to run the reservation system, call center and owner services organization which is in essence an exchange company between resorts.

The Club is vulnerable if owners stop paying maintenance fees. I am working with a number of standalone resorts who are having a much more diffcult time than the Bluegreen Vacation Club. When you have a bigger organization to spread the expense across, you get economies of scale to address owner delinquencies and greater purchasing power to get lower priced furnishings.

If you are commenting about the resort developer, that is a diffferent story. The resort developer business model has a cost to build the resort at about 20-25% of sales. Sales and marketing is about 50-60%. The rest is for profit and other general and admin costs.

To the extent the Bluegreen stock price is low, it's probably because they rely on owner buying at retail and financing their purchases. If those credit facilities dry up where the resort developer sells it's loans, then it can't generate enough cash flow to function as a business. That is a huge problem for the resort developer.

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

But Bluegreen has more operations than just the Vacation Club. They are also in residential development so their exposure as an entity is deeper into real estate than a regular timeshare system. I believe this actually makes them stronger over the long haul than the others.

I'm not ditching them; others are free to avoid them. I like the management, I like that they keep expanding in desirable ways, I like that they value the owners, I like their sense of fiscal responsibility.

I'm not sure they went "looking to get acquired", but, honestly, I wasn't paying that much attention. Most good business people are always on the lookout for attractive opportunities. We don't know what we don't know, so it's quite possible that Bluegreen has considered entertaining other pairings where they are the acquirer.

Anything is possible.

Exactly. The residential unit of BXG is in the toilet. The timeshare side has been carrying it this year.

[timeos2 Senior Member Find all posts View Profile Close timeos2]

It's the same as the others

You are clueless about how the Bluegreen Trust works. Your theoretical understanding is trivial at best. I know it in detail. It is far less vulnerable to downswings because the maintenance fees pay for the operations and it is broadly spread across dozens of resorts. There are maintenance fees which are required to run the standalone resorts. And, there is a $129/year annual dues to run the reservation system, call center and owner services organization which is in essence an exchange company between resorts.

The Club is vulnerable if owners stop paying maintenance fees. I am working with a number of standalone resorts who are having a much more diffcult time than the Bluegreen Vacation Club. When you have a bigger organization to spread the expense across, you get economies of scale to address owner delinquencies and greater purchasing power to get lower priced furnishings.

Thats exactly the way Sunterra/Diamond THE CLUB trust works. Except they have now raised the annual Club fee higher and the base fee is also going higher all the time as all those resorts each need more $$ in annual fees (how many resorts have fees going down?). I fail to see how paying the cost of the fees at X number of resort PLUS an administrative overhead is going to result in lower fees. And as owner bail - just as they do at individual resorts - from the trust the fee goes up for those that remain. There is no free ride. At least at an individual resort you hold a vote and can have a representative Board. Not so with the trust based systems. Funny the control always seem to lie with the developer never the buyers. As Carolinian says never depend on a Developer controlled system. He's got that one correct for sure.

[btcctomtb Senior Member Find all posts View Profile Close btcctomtb]

Exactly. The residential unit of BXG is in the toilet. The timeshare side has been carrying it this year.

Exactly we are carrying it. 10K @ $691 + $129 Is Ridiculous $820 for 1 Week 1 Bed. After they dump the residential I am pretty sure MF will still increase.

Although I have to admit as an owner since 1993 I hav made only 4 Exchanges using BG points. It is the best internal exchange company I have dealt with.

I have also rented out a few weeks in a 1 bed at Solara for $1000 for the week.

All that being said I would still and will but more points as soon as I need them (resale of course)

[BoardGirl Senior Member Find all posts View Profile Close BoardGirl]

At least at an individual resort you hold a vote and can have a representative Board. Not so with the trust based systems. Funny the control always seem to lie with the developer never the buyers. As Carolinian says never depend on a Developer controlled system. He's got that one correct for sure.

Not quite accurate. All owners are invited to run for the board. I've run twice, but, haven't made it yet.

Some of the resorts they acquired (in the RDI deal?) have more on site than just BGVC. CMV and Shenandoah also invite owners to run for their boards.

I don't see it as black box as you do, I guess. But I would agree that if you can't trust the management, maybe you don't want to be involved. I feel that way about stock investments, too. I don't trust my assets to people I don't trust.

[rikkis_playpen Diamond Club Contributor Find all posts View Profile Close rikkis_playpen]

Bluegreen is nothing like the old Sunterra. That's like saying Scarlett Johansson and Phyllis Diller are the same because they are both blond women with all the same body parts.

Jim, I finally read this thread and nearly choked to death on my morning java! I haven't thought of Phyllis in many years- and now that you've brought her back to my attention- you DEFINITELY owe me an apology!

Thanks for the laugh this morning (Even though I'm a few days behind everyone else...)