Return to TIMESHARE RESALES WORLDWIDE Point Systems Chapter 6
One of the emerging results of so many timeshare developers having their own large
system of resorts, is that the owners in such resorts tend to use their points and
stay only in the resorts in their own developer's system, rather than using exchange
companies such as RCI and Interval International.
When owners stay in their own system and don't exchange, that decreases exchange fee
income and other revenue for exchange companies.
RCI instituted it’s GPN Global Points network as an answer to serve the consumer
demand, and to increase profits via income received by marketing GPN.
This tendency for the consumer to prefer points systems is growing because
the vacation trend of Americans is to take several shorter vacations each year
rather than one long vacation.
The best way for timeshare owners to achieve that goal is by owning timeshare in a points-base
timeshare system.
It follows logically that Cendant, the parent company of RCI, would buy Fairfield
as a natural way to create an instant base of points based resorts, and an instant
large community to which to market RCI Global Points Network.
The story below concerns Fairfield’s announcement of the completion of the Cendant purchase, April 2, 2001.
URL to
full story: http://www.efairfield.com/highlights/news.asp
Excerpt from
announcement:
Cendant
Corporation to Acquire Fairfield Communities, Inc. for Approximately $635
Million in Cash or Cash and Stock.
Acquisition Expected to Be Immediately Accretive to Cendant's Earnings
Fairfield Will Expand Cendant's RCI Vacation Exchange Business
NEW YORK and ORLANDO,
Fla., Nov. 2 /PRNewswire/ -- Cendant Corporation (NYSE: CD) and Fairfield
Communities, Inc. (NYSE: FFD) today announced that they have signed a
definitive agreement for Cendant to acquire all of the outstanding common stock
of Fairfield Communities at $15 per share, or approximately $635 million in
aggregate. At least 50% of the consideration will be in cash; the balance will
either be in cash or Cendant common stock, at Cendant's election. The final
acquisition price may increase to a maximum of $16 per share depending on a
formula based on the average trading price of Cendant stock over a twenty
trading day period prior to the closing of the transaction. The transaction is
subject to customary conditions and the approval of Fairfield's shareholders.
The acquisition is
expected to be immediately accretive to Cendant earnings and is expected to
close in early 2001.
Fairfield Communities,
with more than 324,000 vacation-owning households, is the largest vacation
ownership company in the United States, marketing and managing resort
properties at 33 locations in 12 states and the Bahamas. This year over 625,000
families will visit Fairfield resorts. Fairfield operates over 32 dedicated
sales centers and manages over 110 timeshare and whole ownership resort
associations.
For the twelve months
ended September 30, 2000 Fairfield recorded revenues of approximately $560 million,
an 18% increase over the comparable twelve months ended September 30, 1999. Net
earnings for the twelve months ended September 30, 2000 rose over 20% to
approximately $64 million as compared with $53 million in the prior period.
Cendant Chairman, President
and CEO, Henry R. Silverman stated: "Fairfield is known throughout the
resort industry for its strong management and outstanding sales and marketing
capabilities. This acquisition will enable Cendant to expand our timeshare
product offerings to our customers: timeshare developers. We can now offer
Fairfield's proven systems along with Cendant's own core competencies in
vacation exchange, travel agency, consulting and technology to current and
prospective affiliates within the vacation ownership industry."
Stephen P. Holmes,
Chairman, Cendant Travel Division, said: "Since we purchased RCI in 1996,
timeshare has been an important core element in our Travel Division. Expanding
our presence in this fast-growing industry with one of the recognized leaders
will position us to accelerate the Travel Division's growth."
Fairfield President and
CEO, Jim Berk stated: "This acquisition combines Cendant's infrastructure
and global network systems with Fairfield's core competencies of sales and
marketing, resort management, and consumer financing. Together we have all the
components necessary to drive significant growth in the vacation ownership
industry."
The definitive agreement
provides that if Cendant elects to use its common stock as merger
consideration, within a range of Cendant stock prices, the number of Cendant
common shares to be issued per share of Fairfield Communities common stock will
be increased to maintain the value of the consideration to be paid at $15 per
share. Furthermore, if Cendant's stock price increases prior to closing of the
transaction, the value of the consideration to be paid to Fairfield Communities
shareholders will increase, but shall not exceed $16 per share.
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