MARRIOTT VACATIONS Worldwide To Offer $500 Million In Convertible Senior Notes Due 2027
December 6, 2022
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VAC Stock Fair Value – Marriott Vacations Worldwide ($NYSE:VAC) Corporation plans to offer $500 million in convertible senior notes due in 2027 in a private offering. The initial purchasers will have an option to purchase up to an additional $75 million of the notes. The company expects to use the net proceeds to pay the cost of the convertible note hedge transactions described below and the remainder to redeem all of Marriott Ownership Resorts, Inc.’s $500 million of outstanding 6.875% senior unsecured notes due in 2023. The company intends to enter into separate privately negotiated convertible note hedge transactions with one or more of the initial purchasers or their respective affiliates. These convertible note hedge transactions are expected to reduce the potential dilution to the company’s common stock and/or offset any cash payments that would be required in excess of the principal amount of the notes upon conversion of the notes.
However, these transactions could also have the effect of limiting the potential upside benefit to the holders of the notes from any appreciation in the price of the company’s common stock.
Stock Price
On Monday, MARRIOTT VACATIONS WORLDWIDE stock opened at $145.2 and closed at $143.1, drop by 5.1% from prior closing price of 150.8. The company has granted the initial purchasers of the notes an option to purchase up to an additional $75 million in notes. The notes will mature on September 1, 2027, unless earlier converted, redeemed or repurchased. Live Quote…
About the Company
VI Analysis – VAC Stock Fair Value Calculator
Investors often look at a company’s fundamentals in order to gauge its long-term potential. This can be difficult to do on your own, but thankfully there are apps like VI that can simplify the process. According to VI’s analysis, the fair value of MARRIOTT VACATIONS WORLDWIDE shares is around $181.5. This means that the stock is currently undervalued by 21% since it is only trading at $143.1. As such, there may be potential for long-term growth with this company. More…
VI Peers
In the vacation ownership and timeshare industry, Marriott Vacations Worldwide Corp is one of the largest and most well-known companies.
However, it faces stiff competition from a number of other large companies, including iGrandiViaggi SpA, Archon Corp, and Resorttrust Inc. While each of these companies has its own strengths and weaknesses, Marriott has been able to stay ahead of the competition by offering a wide variety of vacation ownership products and experiences that appeal to a broad range of customers.
– iGrandiViaggi SpA ($LTS:0R8E)
Hai Grandi Viaggi SpA is a company that provides travel services. It has a market capitalization of 36.65 million as of 2022 and a return on equity of 0.08%. The company offers a variety of travel-related services, including air travel, hotel accommodations, car rentals, and cruises.
– Archon Corp ($OTCPK:ARHN)
Archon Corporation is a holding company that operates through its subsidiaries. The Company, through its subsidiaries, is engaged in the business of real estate investment, development, management, construction, and brokerage.
– Resorttrust Inc ($TSE:4681)
Resorttrust Inc is a Japanese company that operates resorts and hotels. As of 2022, the company had a market capitalization of 248.83 billion yen and a return on equity of 11.02%. The company operates a total of 74 hotels and resorts, including 57 in Japan and 17 overseas. In addition to hotel and resort operations, the company also provides a range of services such as golf course management, real estate development, and food and beverage operations.
Summary
MARRIOTT VACATIONS WORLDWIDE is a timeshare company that offers vacation ownership and related products under the Marriott Vacation Club, Grand Residences by Marriott, Marriott Vacation Club Pulse, and Marriott Rewards brands. The company operates through three segments: North America, Europe, and Asia Pacific. It develops, markets, sells, and manages vacation ownership and related products under the Marriott Vacation Club and related brands; operates, markets, and sells vacation ownership and related products under The Ritz-Carlton Destination Club brand; and develops, markets, sells, and manages vacation ownership and related products under the Grand Residences by Marriott brand. The company has been working to adapt to this new reality by offering more flexible booking terms and increasing its focus on digital marketing.
