Shares of Hilton Grand Vacations (NYSE: HGV) jumped as much as 12.4% after rumors swirled about a potential buyout. At 12:45 p.m. EDT, the stock remained up 10.4% on the day.
According to The New York Post, Apollo Global, one of the world's largest private equity firms, is interested in buying Hilton Grand Vacations to pair it with the previously acquired timeshare company Diamond Resorts. Hilton Grand Vacations is reportedly being given the option of a full buyout, a merger to remain public, or a tender offer from Apollo.
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Since this is just speculation at the moment, we have no idea what the terms would be, but the $36 price per share has been rumored. That would still be a solid premium to the $31-per-share range at which the stock is trading as I write.
Speculating on buyouts is never a great bet for retail investors because a deal can go south and a stock can drop quickly. That's why I wouldn't dive into the stock today. But investors who own it can keep an eye out for an Apollo buyout moving forward and worry less about buying at a premium. Ultimately, the investment thesis hasn't changed at all today -- there's just a premium on the stock for a buyout that hasn't yet happened.
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