Marriott Vacations Worldwide Corp. agreed to buy ILG Inc. for about $4.7 billion in a stock and cash deal, creating the largest luxury brand for timeshare vacation resorts.
ILG investors will receive $14.75 in cash and 0.165 of Marriott Vacations common stock for each of their shares, the companies said in a statement Monday. The deal represents a premium of about 13 percent, based on the two companies’ closing share prices on Friday. The purchase is expected to result in $75 million of annual savings within two years.
ILG had been facing activist pressure since last year to merge with a competitor. Last May, FrontFour Capital disclosed a 2 percent position in Miami-based ILG and simultaneously urged it to combine with Marriott Vacations. The firm in January nominated four directors to ILG’s board ahead of its annual meeting in May. In February, in a public letter, the activist again urged the board to engage in good faith discussions with Marriott Vacations. FrontFour said that refusal to “entertain such a compelling transaction” would “call into question the existing board’s ability to satisfy its fiduciary duties.”