Stock advice in actual English.
Joined Sep 2, 2009
1,224 Blog Posts

Bluegreen (BXG) Purchase Explanation Part 1

Alright, I’ve reached the conclusion that I won’t have time to sit down and just carve out the entire culmination of my thoughts on BXG and what drove me to buy the name. I don’t have the uninterrupted gap of time to make that happen – and it needs to get done.

So instead we’re taking the modular construction approach here; I’m carving this thing up into pieces and I’ll let you assemble it all when I’m done.

The introduction to the name is as follows: Bluegreen is a timeshare corporation. They weren’t always timeshare, they used to be just a regular real estate company of some kind, if I’m remembering, but then in the 90’s they got into timeshare in a big way. They sort of pioneered the modern timeshare concept, taking the real estate deed/title holder model but building an exchange based travel agency on top of it, so you could go to other owner’s properties at different times of the year – before, you were restricted to the destination you purchased at the time you purchased for.

Alright, so Bluegreen got absolutely rocked in 2008/2009. But they had some management changes and the operation was cleaned up spectacularly. I’ll get into that in more intricate detail later.

Now, the company presently has limited upside of $10 a share…exactly. That’s because the chairman of BXG, an, er…interesting figure by the name of Alan Levan with possible Jeffrey Fastow-type tendencies has accepted an all cash offer to take the company private from a financial group by the name of BankAtlantic Bankcorp (BFCF), which is also chaired by, um…Alan Levan. BFCF presently owns 51% of Bluegreen stock.

The offer was originally for 8 shares of BFCF for every 1 share of BXG, but that was headed for a complete shutdown so Levan changed the offer for what is now a pure cash play.

Now, in my next piece I’ll get more detailed on the possible developments I see with the offer and the company in a minute, but I’ll leave you with this to start: at the current $10 offer, with the stock trading for ~$9.80, there’s a simple arbitrage here that nets about 2%.

In my next post, I’ll argue that that’s probably the minimal outcome and explain what I’d rather see happen.

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  1. insidetrader

    gonna pour a mules ear of scotch and watch the series unfold.

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  2. Tonka

    Analyze management?!? Pffft…I thought we were going to talk more about the Fed!

    It’s refreshing to see people still willing to put quality research into positions rather than just trying to ebb and flow to other people’s interpretation of sentiment.

    I look forward to the rest.

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