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Apollo Global Makes Tender Offer for Diamond Resorts

Chris Lange

Published: June 29, 2016 11:12 am

Last Updated: January 13, 2020 6:14 am

Diamond Resorts International, Inc. (NYSE: DRII) is watching its shares make a handy gain in Wednesday’s session after it was announce that the company will be acquired by Apollo Global Management (NYSE: APO). The companies announced a definitive agreement on Wednesday morning where Apollo will acquire Diamond Resorts for $30.25 per share, for a total value of roughly $2.2 billion.

This all-cash offer represents a premium of 26% from Diamond Resorts’ closing share price on June 28 and a premium of 58% over the closing share price on February 24 (the day that Diamond Resorts announced it was exploring strategic alternatives).

The transaction is expected to close over the next few months. If it is completed, the transaction will result in Diamond Resorts becoming a privately held company.

Additionally, the transaction is conditioned upon satisfaction of the minimum tender condition which requires that shares representing more than 50% of the company’s common shares be tendered and the receipt of certain regulatory approvals and other customary closing conditions.

Mr. David Palmer, CEO of Diamond Resorts, commented:

We have built a solid business focused on operational excellence, hospitality, and customer satisfaction, the result of which has been stellar financial results and strong cash generation. This transaction is an excellent outcome for our shareholders. Apollo values the culture of hospitality and customer service that is the legacy of our Founder and Chairman Stephen J. Cloobeck and instilled in our organization. We are confident that Diamond Resorts will continue to be a vibrant company for our employees, partners and customers, and I am excited about the future of Diamond Resorts.

David Sambur, Partner at Apollo, added:

We are tremendously excited about the opportunity for our funds to acquire Diamond Resorts. Stephen, David, the management team, and Diamond’s more than 8,000 team members have built an amazing customer-centric business with a great reputation that delivers award winning hospitality experiences at great value. We look forward to bringing Apollo’s resources to bear and working with the Diamond Resorts team to continue to grow and enhance their business.

Shares of Apollo were last trading at $15.00, with a consensus analyst price target of $19.04 and a 52-week trading range of $12.35 to $22.61.

Shares of Diamond Resorts were recently trading up nearly 24% at $29.76. The stock has a consensus analyst price target of $32.00 and a 52-week trading range of $16.19 to $32.49.