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The stock market was a bit on edge Monday morning, with major market indexes mixed to slightly higher on the day. The Dow Jones Industrial Average (^DJI 1.58%) was the biggest winner, while other benchmarks stayed close to unchanged.
Investors are trying to work their way through an eventful week, which will include the latest reading on consumer inflation on Tuesday morning and the Federal Reserve’s next interest rate decision, on Wednesday afternoon.
Even with those big events on the schedule, investors in a couple of stocks didn’t wait to celebrate. Shares of Weber (WEBR 23.23%) and Bluegreen Vacations Holding (NYSE: BVH) moved sharply higher, as both companies announced favorable news that investors were ready to hear. Read on to get the latest and find out what could come next for both of these stocks.
Shares of Weber moved higher by 23% late Monday morning. The maker of grills and other outdoor cooking equipment hasn’t been a publicly traded company for very long, but it decided to accept an acquisition offer that will result in it once again becoming a privately held business.
Weber announced that it had accepted a $3.7 billion buyout bid from private equity investor BDT Capital Partners. Under the terms of the deal, Weber shareholders will receive $8.05 per share in cash for their stock. That’s 60% above the price at which Weber stock traded in late October, immediately before BDT Capital made a nonbinding proposal to Weber’s board of directors to acquire the grill maker. The parties anticipate that the deal will close in the first half of 2023.
One interesting aspect of the acquisition is that it comes only a bit more than a year after Weber did an initial public offering (IPO). At the time, the grill maker was in high demand, as people who were stuck at home during pandemic-related lockdowns looked to upgrade their living spaces. In particular, outdoor cooking equipment was especially important as people cautiously started to gather together once again.
Since then, though, stocks of companies that did well during the pandemic have cooled off, and BDT Capital took the opportunity to repurchase the remainder of the Weber stock it didn’t already own. That’s bad news for those who bought at higher prices in the IPO or shortly after, but it does show that value-hunting institutional investors are hungry for deals.
Meanwhile, shares of Bluegreen Vacations Holding jumped 14%. Shareholders in the vacation-related real estate specialist were pleased to see the company boost its offering price for a portion of its shares.
Bluegreen Vacations had previously made a tender offer to shareholders, under which it had proposed to pay $22.17 per share in cash to buy up to 4.5 million shares of the company. On Monday, though, Bluegreen decided to boost the value of that bid to $25 per share. That new offer price is 47% above where the stock traded in early November, immediately before the company said it was looking to do a tender offer.
It has seen mixed performance in its business lately. In its most recent quarterly results, the company said earnings per share and revenue rose as it sold more vacation ownership interests and had more guest tours. But vacation package sales were down year over year. High demand as pandemic-hit markets reopened helped the business, but after a big rise in the stock in 2021, the vacation travel stock gave up considerable ground in 2022.
It’s important to understand that the tender offer is for only about 25% to 30% of Bluegreen’s outstanding shares, so the company won’t be going private. Even so, though, investors see the offer as a vote of confidence in Bluegreen’s prospects.
Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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