UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13E-3
(RULE 13e-100)
RULE 13e-3 TRANSACTION STATEMENT UNDER SECTION 13(e)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
BBX CAPITAL CORPORATION
(Name of the Issuer)
BBX Capital Corporation
BFC Financial Corporation
BBX Merger Subsidiary LLC
John E. Abdo
Jarett S. Levan
Seth M. Wise
Raymond S. Lopez
Alan B. Levan
(Name of Persons Filing Statement)
Class A Common Stock, Par Value $0.01 Per Share
(Title of Class of Securities)
05540P100
(CUSIP Number of Class of Securities)
BBX Capital Corporation Raymond S. Lopez Executive Vice President and Chief Financial Officer 401 East Las Olas Boulevard, Suite 800 Fort Lauderdale, Florida 33301 (954) 940-4000 |
BFC Financial Corporation Jarett S. Levan Acting Chairman, Chief Executive Officer and President 401 East Las Olas Boulevard, Suite 800 Fort Lauderdale, Florida 33301 (954) 940-4900 |
(Name, Address, and Telephone Numbers of Person Authorized to Receive Notices and Communications on Behalf of the Persons Filing Statement)
copy to:
Stephen K. Roddenberry Akerman LLP Three Brickell City Centre 98 Southeast Seventh Street Suite 1100 Miami, Florida 33131 (305) 374-5600 |
Alison W. Miller Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A. 150 West Flagler Street Suite 2200 Miami, Florida 33130 (305) 789-3200 |
This statement is filed in connection with (check the appropriate box):
x | The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the Securities Exchange Act of 1934. |
x | The filing of a registration statement under the Securities Act of 1933. |
¨ | A tender offer. |
¨ | None of the above. |
Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: x
Check the following box if the filing is a final amendment reporting the results of the transaction: ¨
Calculation of Filing Fee
Transaction Valuation(1) | Amount of Filing Fee(2) | |
$452,296,763 | $45,546.28 |
(1) | Calculated solely for the purpose of determining the filing fee. The transaction value was calculated by taking (i) the product of (a) $19.84, the average of the high and low prices per share of BBX Capital Class A Common Stock on August 18, 2016, as quoted on the New York Stock Exchange, and (b) the number of shares of BBX Capital Class A Common Stock outstanding (other than shares owned directly or indirectly by BFC) or issuable pursuant to the vesting of restricted stock units or the exercise of outstanding options minus (ii) $30,727,500, the estimated aggregate amount of cash consideration to be paid by BFC in the merger in exchange for shares of BBX Capital Class A Common Stock. |
(2) | The filing fee was determined by multiplying the Transaction Valuation by .0001007. |
x | Check the box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
Amount Previously Paid: $45,546.28 | Filing Party: BFC Financial Corporation | |
Form or Registration No.: Form S-4 (Registration No. 333-213282) | Date Filed: August 24, 2016 |
INTRODUCTION
This Rule 13e-3 Transaction Statement on Schedule 13E-3, together with the exhibits hereto (this Schedule 13E-3), is being filed with the Securities and Exchange Commission (the SEC) jointly by the following persons (collectively, the filing persons): (a) BBX Capital Corporation, a Florida corporation (BBX Capital); (b) BFC Financial Corporation, a Florida corporation (BFC); (c) BBX Merger Subsidiary LLC, a Florida limited liability company and wholly owned subsidiary of BFC (Merger Sub); (d) John E. Abdo; (e) Jarett S. Levan; (f) Seth M. Wise; (g) Raymond S. Lopez; and (h) Alan B. Levan.
On July 27, 2016, BBX Capital entered into an Agreement and Plan of Merger (the Merger Agreement) with BFC and Merger Sub. Pursuant to the Merger Agreement, BBX Capital will merge with and into Merger Sub, (the Merger), with Merger Sub surviving the Merger as a wholly owned subsidiary of BFC and BBX Capitals shareholders (other than BFC and shareholders who exercise and perfect their appraisal rights in accordance with Florida law) will have the right to receive, in consideration for each share of BBX Capitals Class A Common Stock they own at the effective time of the Merger, at their election, $20.00 in cash, without interest, or 5.4 shares of BFCs Class A Common Stock. Pursuant to the terms of the Merger Agreement, the shares of BBX Capitals Class A Common Stock and Class B Common Stock owned by BFC will be canceled in connection with the Merger. Options to acquire shares of BBX Capitals Class A Common Stock and restricted stock units of BBX Capitals Class A Common Stock outstanding at the effective time of the Merger will, upon consummation of the Merger, be converted automatically into options to purchase shares of BFCs Class A Common Stock or restricted stock units of BFCs Class A Common Stock, as applicable, and be subject to the same terms and conditions as in effect at the effective time of the Merger; provided, however, that (i) the number of shares which may be purchased upon exercise of the options, and the number of shares subject to the restricted stock units, will be multiplied by 5.4, and (ii) the exercise price of the options will be divided by 5.4.
BFC owns shares of BBX Capitals Class A Common Stock and Class B Common Stock representing an approximately 81% equity interest and 90% voting interest in BBX Capital. BFC and Merger Sub, a wholly owned subsidiary of BFC, are parties to the Merger Agreement. John E. Abdo, who serves as Vice Chairman of BFC and BBX Capital, and Alan B. Levan, who serves in a non-executive capacity as Founder and strategic advisor for each of BFC and BBX Capital and is the former Chairman, Chief Executive Officer and President of BFC and the former Chairman and Chief Executive Officer of BBX Capital, may be deemed to control BFC by virtue of their collective ownership of shares of BFCs Class A Common Stock and Class B Common Stock representing approximately 76% of the total voting power of BFC. Jarett S. Levan is the son of Mr. Alan Levan and is the Acting Chairman, Chief Executive Officer and President of BFC and the President and Acting Chairman and Chief Executive Officer of BBX Capital. Seth M. Wise is a director and Executive Vice President of BFC and Executive Vice President of BBX Capital. Raymond S. Lopez is Executive Vice President, Chief Financial Officer and Chief Accounting Officer of BFC and Executive Vice President and Chief Financial Officer of BBX Capital.
Concurrently with the filing of this Schedule 13E-3, BFC is filing with the Securities and Exchange Commission (the SEC) a Registration Statement on Form S-4 (the Form S-4), which contains a proxy statement/prospectus (the proxy statement/prospectus), which constitutes (i) a prospectus of BFC under Section 5 of the Securities Act of 1933 and the rules and regulations promulgated thereunder, in each case as amended (the Securities Act), with respect to the shares of BFCs Class A Common Stock which may be issued to BBX Capitals shareholders in connection with the merger; and (ii) a notice of meeting and a proxy statement of BBX Capital under Section 14(a) of the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder, in each case as amended (the Exchange Act), with respect to the special meeting of BBX Capitals shareholders, at which BBX Capitals shareholders will consider and vote upon the Merger Agreement. A copy of the proxy statement/prospectus is attached hereto as Exhibit (a)(3) and a copy of the Merger Agreement is attached as Annex A to the proxy statement/prospectus.
The cross-references below are being supplied pursuant to General Instruction G of Schedule 13E-3 and show the location in the proxy statement/prospectus of the information required to be included in response to the Items of Schedule 13E-3. The information contained in the proxy statement/prospectus, including all annexes thereto, and documents incorporated by reference into the proxy statement/prospectus is expressly incorporated herein by reference. As of the date hereof, the proxy statement/prospectus is in preliminary form and is subject to completion. Capitalized terms used but not defined in this Schedule 13E-3 shall have the meanings given to them in the proxy statement/prospectus. The responses to each item in this Schedule 13E-3 are qualified in their entirety by the information contained in the proxy statement/prospectus.
The information contained in this Schedule 13E-3 and the proxy statement/prospectus concerning BBX Capital was supplied by BBX Capital, and the information contained in this Schedule 13E-3 and the proxy statement/prospectus concerning each filing person other than BBX Capital was supplied by each such filing person.
Item 1. | Summary Term Sheet. |
The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference.
SUMMARY TERM SHEET
QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE BBX CAPITAL SPECIAL MEETING
Item 2. | Subject Company Information. |
(a) | Name and Address. The information set forth in the proxy statement/prospectus under the caption SUMMARY TERM SHEETThe Parties to the Merger Agreement BBX Capital Corporation is incorporated herein by reference. |
(b) | Securities. The class of securities to which this Schedule 13E-3 relates is Class A Common Stock, par value $0.01 per share, of BBX Capital. The information set forth in the proxy statement/prospectus under the caption THE BBX CAPITAL SPECIAL MEETINGRecord Date; Shares Entitled to Vote is incorporated herein by reference. As of August 18, 2016, 16,199,145 shares of BBX Capitals Class A Common Stock were outstanding. |
(c) | Trading Market and Price. The information set forth in the proxy statement/prospectus under the caption COMPARATIVE STOCK PRICES AND DIVIDENDS, AND RELATED SHAREHOLDER MATTERS is incorporated herein by reference. |
(d) | Dividends. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
SUMMARY TERM SHEETMarket Price and Dividends
THE MERGER AGREEMENTConduct of Business by BFC and BBX Capital Prior to Consummation of the Merger
COMPARATIVE STOCK PRICES AND DIVIDENDS, AND RELATED SHAREHOLDER MATTERS
ANNEX AAGREEMENT AND PLAN OF MERGER
(e) | Prior Public Offerings. The information set forth in the proxy statement/prospectus under the caption INFORMATION ABOUT BBX CAPITALTransactions in, and Agreements relating to, BBX Capitals Class A Common Stock is incorporated herein by reference. |
(f) | Prior Stock Purchases. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference. |
SPECIAL FACTORSBackground of the Merger
INFORMATION ABOUT BBX CAPITALTransactions in, and Agreements relating to, BBX Capitals Class A Common Stock
WHERE YOU CAN FIND MORE INFORMATION
ANNEX CBACKGROUND OF THE 2015 TENDER OFFER
Item 3. | Identity and Background of Filing Person. |
(a) | Name and Address. BBX Capital is the subject company. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
SUMMARY TERM SHEETThe Parties to the Merger Agreement
SPECIAL FACTORSThe Purchaser Group
SPECIAL FACTORSInterests of Certain Persons in the Merger
THE MERGER AGREEMENTParties to the Merger Agreement
INFORMATION ABOUT BBX CAPITALDirectors and Executive Officers
INFORMATION ABOUT BBX CAPITALSecurity Ownership of Certain Beneficial Owners and Management
INFORMATION ABOUT THE PURCHASER GROUPMembers of the Purchaser Group
INFORMATION ABOUT THE PURCHASER GROUPInformation about BFC
INFORMATION ABOUT THE PURCHASER GROUPInformation about Merger Sub
INFORMATION ABOUT THE PURCHASER GROUPInformation about John E. Abdo, Alan B. Levan, Jarett S. Levan, Seth M. Wise and Raymond S. Lopez
INFORMATION ABOUT THE PURCHASER GROUPDirectors, Executive Officers and Managers of BFC and Merger Sub
(b) | Business and Background of Entities. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
SUMMARY TERM SHEETThe Parties to the Merger Agreement
THE MERGER AGREEMENTParties to the Merger Agreement
INFORMATION ABOUT BBX CAPITALCertain Proceedings
INFORMATION ABOUT BBX CAPITALGeneral
INFORMATION ABOUT THE PURCHASER GROUPInformation about BFC
INFORMATION ABOUT THE PURCHASER GROUPInformation about Merger Sub
INFORMATION ABOUT THE PURCHASER GROUPCertain Proceedings
(c) | Business and Background of Natural Persons. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
INFORMATION ABOUT BBX CAPITALDirectors and Executive Officers
INFORMATION ABOUT BBX CAPITALCertain Proceedings
INFORMATION ABOUT THE PURCHASER GROUPInformation about John E. Abdo, Alan B. Levan, Jarett S. Levan, Seth M. Wise and Raymond S. Lopez
INFORMATION ABOUT THE PURCHASER GROUPDirectors, Executive Officers and Managers of BFC and Merger Sub
INFORMATION ABOUT THE PURCHASER GROUPCertain Proceedings
Item 4. | Terms of the Transaction. |
(a)(1) | Tender Offers. Not applicable. |
(a)(2) | Mergers or Similar Transactions. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
SUMMARY TERM SHEET
QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE BBX CAPITAL SPECIAL MEETING
SPECIAL FACTORSEffects of the Merger
SPECIAL FACTORSRecommendation of BBX Capitals Special Committee and Board of Directors; Their Reasons for the Merger; Fairness of the Merger
SPECIAL FACTORSPurposes and Reasons of the Purchaser Group for the Merger
SPECIAL FACTORSMaterial United States Federal Income Tax Consequences
THE BBX CAPITAL SPECIAL MEETING
SPECIAL FACTORSAnticipated Accounting Treatment
THE MERGER AGREEMENT
ANNEX AAGREEMENT AND PLAN OF MERGER
(c) | Different Terms. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
SUMMARY TERM SHEET
QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE BBX CAPITAL SPECIAL MEETING
SPECIAL FACTORSEffects of the Merger
SPECIAL FACTORSInterests of Certain Persons in the Merger
THE MERGER AGREEMENTMerger Consideration
THE MERGER AGREEMENTTreatment of Stock Options and Restricted Stock Units Outstanding Under BBX Capitals Equity Compensation Plans
ANNEX AAGREEMENT AND PLAN OF MERGER
(d) | Appraisal Rights. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
SUMMARY TERM SHEETAppraisal Rights
QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE BBX CAPITAL SPECIAL MEETING
APPRAISAL RIGHTS
ANNEX DFLORIDA BUSINESS CORPORATION ACT APPRAISAL RIGHTS STATUTES (Sections 607.1301-607.1333)
(e) | Provisions For Unaffiliated Security Holders. The information set forth in the proxy statement/prospectus under the caption SPECIAL FACTORSProvisions for Unaffiliated Shareholders is incorporated herein by reference. |
(f) | Eligibility for Listing or Trading. The information set forth in the proxy statement/prospectus under the caption COMPARATIVE STOCK PRICES AND DIVIDENDS, AND RELATED SHAREHOLDER MATTERS Comparative Stock Prices is incorporated herein by reference. |
Item 5. | Past Contacts, Transactions, Negotiations and Agreements. |
(a) | Transactions. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
SUMMARY TERM SHEETInterests of Certain Persons in the Merger
SPECIAL FACTORSInterests of Certain Persons in the Merger
SPECIAL FACTORSRelated Party Transactions
INFORMATION ABOUT BBX CAPITALTransactions in, and Agreements relating to, BBX Capitals Class A Common Stock
(b)-(c) | Significant Corporate Events; Negotiations or Contacts. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
SUMMARY TERM SHEET
QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE BBX CAPITAL SPECIAL MEETING
SPECIAL FACTORSBackground of the Merger
SPECIAL FACTORSRelated Party Transactions
SPECIAL FACTORSAdditional Information Regarding Bluegreen
THE MERGER AGREEMENT
ANNEX AAGREEMENT AND PLAN OF MERGER
ANNEX CBACKGROUND OF THE 2015 TENDER OFFER
(e) | Agreements Involving the Subject Companys Securities. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
SUMMARY TERM SHEET
QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE BBX CAPITAL SPECIAL MEETING
SPECIAL FACTORSRelated Party Transactions
THE BBX CAPITAL SPECIAL MEETINGShares Owned by BFC and Directors and Officers of BBX Capital
THE MERGER AGREEMENT
INFORMATION ABOUT BBX CAPITALSecurity Ownership of Certain Beneficial Owners and Management
INFORMATION ABOUT THE PURCHASER GROUPBeneficial Ownership of, and Agreements Involving, BBX Capitals Securities
ANNEX AAGREEMENT AND PLAN OF MERGER
Item 6. | Purposes of the Transaction and Plans or Proposals. |
(b) | Use of Securities Acquired. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
SUMMARY TERM SHEET
QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE BBX CAPITAL SPECIAL MEETING
SPECIAL FACTORSEffects of the Merger
SPECIAL FACTORSOperations of BBX Capital and BFC Prior to and After the Effective Time of the Merger
SPECIAL FACTORSDelisting and Deregistration of BBX Capitals Class A Common Stock
THE MERGER AGREEMENTThe Merger
THE MERGER AGREEMENTMerger Consideration
THE MERGER AGREEMENT Treatment of Stock Options and Restricted Stock Units Outstanding under BBX Capitals Equity Compensation Plans
ANNEX AAGREEMENT AND PLAN OF MERGER
(c)(1)-(8) | Plans. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
SUMMARY TERM SHEET
QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE BBX CAPITAL SPECIAL MEETING
SPECIAL FACTORSEffects of the Merger
SPECIAL FACTORSBackground of the Merger
SPECIAL FACTORSPurposes and Reasons of the Purchaser Group for the Merger
SPECIAL FACTORSOperations of BBX Capital and BFC Prior to and After the Effective Time of the Merger
SPECIAL FACTORSBoard of Directors and Executive Officers of BFC Following the Merger
SPECIAL FACTORSDelisting and Deregistration of BBX Capitals Class A Common Stock
THE MERGER AGREEMENT
ANNEX AAGREEMENT AND PLAN OF MERGER
Item 7. | Purposes, Alternatives, Reasons and Effects. |
(a) | Purposes. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
SUMMARY TERM SHEET
QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE BBX CAPITAL SPECIAL MEETING
SPECIAL FACTORSEffects of the Merger
SPECIAL FACTORSBackground of the Merger
SPECIAL FACTORSRecommendation of BBX Capitals Special Committee and Board of Directors; Their Reasons for the Merger; Fairness of the Merger
SPECIAL FACTORSPurposes and Reasons of the Purchaser Group for the Merger
SPECIAL FACTORS Operations of BBX Capital and BFC Prior to and After the Effective Time of the Merger
(b) | Alternatives. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
SPECIAL FACTORSBackground of the Merger
SPECIAL FACTORSRecommendation of BBX Capitals Special Committee and Board of Directors; Their Reasons for the Merger; Fairness of the Merger
SPECIAL FACTORSPurposes and Reasons of the Purchaser Group for the Merger
(c) | Reasons. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
SPECIAL FACTORSBackground of the Merger
SPECIAL FACTORSRecommendation of BBX Capitals Special Committee and Board of Directors; Their Reasons for the Merger; Fairness of the Merger
SPECIAL FACTORSPurposes and Reasons of the Purchaser Group for the Merger
(d) | Effects. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
SUMMARY TERM SHEET
QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE BBX CAPITAL SPECIAL MEETING
SPECIAL FACTORSEffects of the Merger
SPECIAL FACTORSRecommendation of BBX Capitals Special Committee and Board of Directors; Their Reasons for the Merger; Fairness of the Merger
SPECIAL FACTORSPurposes and Reasons of the Purchaser Group for the Merger
SPECIAL FACTORSEffects on BBX Capital if the Merger is not Completed
SPECIAL FACTORS Operations of BBX Capital and BFC Prior to and After the Effective Time of the Merger
SPECIAL FACTORS Delisting and Deregistration of BBX Capitals Class A Common Stock
SPECIAL FACTORSMaterial United States Federal Income Tax Consequences
SPECIAL FACTORSEstimated Fees and Expenses
THE MERGER AGREEMENT
APPRAISAL RIGHTS
COMPARISON OF RIGHTS OF COMMON SHAREHOLDERS OF BFC AND BBX CAPITAL
ANNEX AAGREEMENT AND PLAN OF MERGER
ANNEX DFLORIDA BUSINESS CORPORATION ACT APPRAISAL RIGHTS STATUTES (Sections 607.1301-607.1333)
Item 8. | Fairness of the Transaction. |
(a) | Fairness. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
SUMMARY TERM SHEET
QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE BBX CAPITAL SPECIAL MEETING
SPECIAL FACTORSRecommendation of BBX Capitals Special Committee and Board of Directors; Their Reasons for the Merger; Fairness of the Merger
SPECIAL FACTORSPosition of the Purchaser Group Regarding the Fairness of the Merger
(b) | Factors Considered in Determining Fairness. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
SUMMARY TERM SHEET
SPECIAL FACTORSBackground of the Merger
SPECIAL FACTORSRecommendation of BBX Capitals Special Committee and Board of Directors; Their Reasons for the Merger; Fairness of the Merger
SPECIAL FACTORSOpinion of the Financial Advisor to BBX Capitals Special Committee
SPECIAL FACTORSPosition of the Purchaser Group Regarding the Fairness of the Merger
ANNEX BOPINION OF HOVDE GROUP, LLC
See also the presentation attached hereto as exhibit (c)(2) and incorporated by reference herein, which was prepared by Hovde Group, LLC (Hovde), the financial advisor to the special committee of BBX Capitals board of directors.
(c) | Approval of Security Holders. The information set forth in the proxy statement/prospectus under the caption SPECIAL FACTORSRecommendation of BBX Capitals Special Committee and Board of Directors; Their Reasons for the Merger; Fairness of the Merger is incorporated herein by reference: |
(d) | Unaffiliated Representative. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
SUMMARY TERM SHEETRecommendations of BBX Capitals Special Committee and Board of Directors
SUMMARY TERM SHEET Opinion of the Financial Advisor to BBX Capitals Special Committee
SPECIAL FACTORSBackground of the Merger
SPECIAL FACTORS Recommendation of BBX Capitals Special Committee and Board of Directors; Their Reasons for the Merger; Fairness of the Merger
SPECIAL FACTORSOpinion of the Financial Advisor to BBX Capitals Special Committee
SPECIAL FACTORSPosition of the Purchaser Group Regarding the Fairness of the Merger
SPECIAL FACTORSProvisions for Unaffiliated Shareholders
ANNEX B OPINION OF HOVDE GROUP, LLC
(e) | Approval of Directors. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
SUMMARY TERM SHEETRecommendations of BBX Capitals Special Committee and Board of Directors
QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE BBX CAPITAL SPECIAL MEETING
SPECIAL FACTORSBackground of the Merger
SPECIAL FACTORSRecommendation of BBX Capitals Special Committee and Board of Directors; Their Reasons for the Merger; Fairness of the Merger
(f) | Other Offers. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
SPECIAL FACTORSBackground of the Merger
SPECIAL FACTORSRecommendation of BBX Capitals Special Committee and Board of Directors; Their Reasons for the Merger; Fairness of the Merger
SPECIAL FACTORSPosition of the Purchaser Group Regarding the Fairness of the Merger
Item 9. | Reports, Opinions, Appraisals and Negotiations. |
(a)-(b) | Report, Opinion or Appraisal; Preparer and Summary of the Report, Opinion or Appraisal. The presentation made by Hovde Group, LLC at a joint meeting of BBX Capitals special meeting and board of directors on July 27, 2016 is attached hereto as Exhibit (c)(2) and is incorporated herein by reference. The presentation made by Keefe, Bruyette & Woods, Inc. at a meeting of BFCs board of directors held on July 26, 2016, is attached hereto as Exhibit (c)(3) and is incorporated herein by reference. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
SUMMARY TERM SHEET
SPECIAL FACTORSBackground of the Merger
SPECIAL FACTORSRecommendation of BBX Capitals Special Committee and Board of Directors; Their Reasons for the Merger; Fairness of the Merger
SPECIAL FACTORSOpinion of the Financial Advisor to BBX Capitals Special Committee
SPECIAL FACTORSPosition of the Purchaser Group Regarding the Fairness of the Merger
SPECIAL FACTORSSummary of Financial Presentation of Keefe, Bruyette & Woods, Inc. to BFCs Board of Directors
ANNEX BOPINION OF HOVDE GROUP, LLC
(c) | Availability of Documents. The reports, opinions and appraisals referenced in this Item 9 are available for inspection and copying at BBX Capitals principal executive offices at 401 East Las Olas Boulevard, Suite 800, Fort Lauderdale, Florida 33301, during regular business hours by any interested shareholder of BBX Capital or any representative of such shareholder who has been so designated in writing. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference. |
SPECIAL FACTORSOpinion of the Financial Advisor to BBX Capitals Special Committee
SPECIAL FACTORS Summary of Financial Presentation of Keefe, Bruyette & Woods, Inc. to BFCs Board of Directors
Item 10. | Source and Amounts of Funds or Other Consideration. |
(a)-(b) | Source of Funds; Conditions. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
SUMMARY TERM SHEETFinancing of the Merger
SPECIAL FACTORSFinancing of the Merger
(c) | Expenses. The information set forth in the proxy statement/prospectus under the caption SPECIAL FACTORSEstimated Fees and Expenses is incorporated herein by reference. |
(d) | Borrowed Funds. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
SUMMARY TERM SHEETFinancing of the Merger
SPECIAL FACTORSFinancing of the Merger
Item 11. | Interest in Securities of the Subject Company. |
(a) | Securities Ownership. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
INFORMATION ABOUT BBX CAPITALSecurity Ownership of Certain Beneficial Owners and Management
INFORMATION ABOUT THE PURCHASER GROUPBeneficial Ownership of, and Agreements Involving, BBX Capitals Securities
(b) | Securities Transactions. The information set forth in the proxy statement/prospectus under the caption INFORMATION ABOUT THE PURCHASER GROUPBeneficial Ownership of Securities is incorporated herein by reference. |
Item 12. | The Solicitation or Recommendation. |
(d) | Intent to Tender or Vote in a Going-Private Transaction. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE BBX CAPITAL SPECIAL MEETING
THE BBX CAPITAL SPECIAL MEETINGShares Owned by BFC and Directors and Officers of BBX Capital
THE MERGER AGREEMENT Other Covenants and Agreements
ANNEX AAGREEMENT AND PLAN OF MERGER
(e) | Recommendation of Others. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
SUMMARY TERM SHEET
QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE BBX CAPITAL SPECIAL MEETING
SPECIAL FACTORSBackground of the Merger
SPECIAL FACTORS Recommendation of BBX Capitals Special Committee and Board of Directors; Their Reasons for the Merger; Fairness of the Merger
SPECIAL FACTORSPosition of the Purchaser Group Regarding the Fairness of the Merger
THE MERGER AGREEMENTOther Covenants and Agreements
ANNEX AAGREEMENT AND PLAN OF MERGER
Item 13. | Financial Statements. |
(a) | Financial Information. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
SUMMARY TERM SHEETSelected Historical Consolidated Financial Information of BBX Capital
SUMMARY TERM SHEET Unaudited Comparative Per Share Information
WHERE YOU CAN FIND MORE INFORMATION
(b) | Pro Forma Information. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
SUMMARY TERM SHEETSelected Unaudited Pro Forma Condensed Consolidated Financial Information
SUMMARY TERM SHEETUnaudited Comparative Per Share Information
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
WHERE YOU CAN FIND MORE INFORMATION
Item 14. | Persons/Assets, Retained, Employed, Compensated or Used. |
(a) | Solicitations or Recommendations. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE BBX CAPITAL SPECIAL MEETING
SPECIAL FACTORSEstimated Fees and Expenses
THE BBX CAPITAL SPECIAL MEETINGProxy Solicitation
THE BBX CAPITAL SPECIAL MEETINGAssistance
(b) | Employees and Corporate Assets. The information set forth in the proxy statement/prospectus under the following captions is incorporated herein by reference: |
SUMMARY TERM SHEET
QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE BBX CAPITAL SPECIAL MEETING
SPECIAL FACTORSFinancing of the Merger
SPECIAL FACTORSEstimated Fees and Expenses
THE BBX CAPITAL SPECIAL MEETINGProxy Solicitation
Item 15. | Additional Information. |
(b) | Golden Parachute Compensation. The information set forth in the proxy statement/prospectus under the caption SPECIAL FACTORS No Golden Parachute Compensation is incorporated herein by reference. |
(c) | Other Material Information. The information set forth in the proxy statement/prospectus, including all annexes thereto, is incorporated herein by reference. |
Item 16. | Exhibits. |
(a)(1) | Letter to Shareholders of BBX Capital Corporation (incorporated by reference to the Registration Statement on Form S-4 filed by BFC Financial Corporation with the Securities and Exchange Commission on August 24, 2016) |
(a)(2) | Notice of Special Meeting of Shareholders of BBX Capital Corporation (incorporated by reference to the Registration Statement on Form S-4 filed by BFC Financial Corporation with the Securities and Exchange Commission on August 24, 2016) |
(a)(3) | Proxy Statement of BBX Capital Corporation (incorporated by reference to the Registration Statement on Form S-4 filed by BFC Financial Corporation with the Securities and Exchange Commission on August 24, 2016) |
(c)(1) | Opinion of Hovde Group, LLC, dated July 27, 2016 (incorporated by reference to Annex B of the proxy statement/prospectus included in the Registration Statement on Form S-4 filed by BFC Financial Corporation with the Securities and Exchange Commission on August 24, 2016) |
(c)(2) | Presentation Materials, dated July 27, 2016, of Hovde Group, LLC |
(c)(3) | Presentation Materials, dated July 26, 2016, of Keefe, Bruyette & Woods, Inc. |
(d)(1) | Agreement and Plan of Merger, dated July 27, 2016, by and among BFC Financial Corproation, BBX Merger Subsidiary LLC and BBX Capital Corporation (incorporated by reference to Annex A of the proxy statement/prospectus included in the Registration Statement on Form S-4 filed by BFC Financial Corporation with the Securities and Exchange Commission on August 24, 2016) |
(e) | Description of the Share Exchange Agreements between BFC Financial Corporation and each of Alan B. Levan, John E. Abdo, Jarett S. Levan and Seth M. Wise (incorporated by reference to the discussion of such Share Exchange Agreements contained in the Special FactorsRelated Party Transactions section of the proxy statement/prospectus included in the Registration Statement on Form S-4 filed by BFC Financial Corporation with the Securities and Exchange Commission on August 24, 2016) |
(f) | Sections 607.1301-607.1333 of the Florida Business Corporation Act (incorporated by reference to Annex D of the proxy statement/prospectus included in the Registration Statement on Form S-4 filed by BFC Financial Corporation with the Securities and Exchange Commission on August 24, 2016) |
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
BBX CAPITAL CORPORATION | ||||||
Date: August 24, 2016 | By: | /s/ Raymond S. Lopez | ||||
Name: | Raymond S. Lopez | |||||
Title: | Executive Vice President and Chief Financial Officer |
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
BFC FINANCIAL CORPORATION | ||||||
Date: August 24, 2016 | By: | /s/ Jarett S. Levan | ||||
Name: | Jarett S. Levan | |||||
Title: | Acting Chairman, Chief Executive Officer and President |
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
BBX MERGER SUBSIDIARY LLC | ||||||
Date: August 24, 2016 | By: | /s/ Jarett S. Levan | ||||
Name: | Jarett S. Levan | |||||
Title: | Chief Executive Officer and President |
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Date: August 24, 2016 | /s/ John E. Abdo | |||||
John E. Abdo |
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Date: August 24, 2016 | /s/ Jarett S. Levan | |||
Jarett S. Levan |
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Date: August 24, 2016 | /s/ Seth M. Wise | |||
Seth M. Wise |
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Date: August 24, 2016 |
/s/ Raymond S. Lopez | |||
Raymond S. Lopez |
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Date: August 24, 2016 | /s/ Alan B. Levan | |||
Alan B. Levan |
Exhibit (c)(2)
|
CONFIDENTIAL
PROJECT PANTHER
FAIRNESS ANALYSIS PRESENTED TO THE SPECIAL COMMITTEE OF INDEPENDENT DIRECTORS
JULY 27, 2016
The information contained herein is of a confidential nature and is intended for the use of the persons or firm to whom it is furnished by us. Reproduction, publication, or dissemination of any portion hereof may not be made without the prior approval of Hovde Group, LLC
|
IMPORTANT DISCLOSURES
This Confidential Presentation, and any oral or video presentation that supplements it (the Presentation), have been developed by and are proprietary to Hovde Group, LLC (Hovde) and were prepared exclusively for the benefit and internal use of the Special Committee of independent directors of the Board of Directors (the Special Committee) of BBX Capital Corporation (BBX Capital or the Company) only. Neither this presentation nor any oral or video presentation that supplements it, nor any of their contents, may be reproduced, distributed or used for any other purpose without the prior written consent of Hovde. If you are not the intended recipient of this document (or a person responsible for delivering such document to the intended recipient), you are hereby notified that any disclosure, copying, distribution, as the case may be, or the taking of any action in reliance on the contents of the information contained in this document is strictly prohibited. If you have received this document in error or are not the named addressee, please notify Hovde immediately and destroy this document.
These materials, other than our written fairness opinion, were prepared for use in the context of an oral presentation to the Special Committee, and are not intended to represent an opinion but rather to serve as discussion materials for the Special Committee to review and as a summary of the basis for the fairness opinion. The oral presentation by Hovde and this Presentation are subject to a number of qualifications, assumptions, and limitations as stated herein and in the fairness opinion letter.
The analyses contained herein rely upon information obtained from the Company, the prospective transaction partner, and/or from public sources, the accuracy of which has not been verified, and cannot be assured, by Hovde. Moreover, many of the projections and financial analyses herein are based on estimated financial performance prepared by or in consultation with the Company and are intended only to suggest reasonable ranges of results and are otherwise incomplete without any oral or video presentation that supplements it. Accordingly, no representation or warranty, expressed or implied, is made to, and no reliance should be placed on, the accuracy, completeness or correctness of the information and estimates contained in this document. The opinions and estimates expressed herein reflect only the current judgment of Hovde based on the information provided to it by the Company, and as otherwise available to it as of the respective dates contemplated thereby.
The information contained in this Presentation is based solely upon the information available to us and the economic, market and other circumstances as they exist as of the date thereof. Events occurring and information that becomes available thereafter, could materially affect the assumptions and information used in providing the analyses contained herein. In providing the analyses herein, Hovde has assumed, without independent verification, that the representations and financial and other information provided to it by the Company and the prospective transaction partner that form a substantial basis for the valuations and analyses contained herein, are true and complete. In that regard, Hovde has assumed that the financial forecasts and other information, including, without limitation, any projections regarding financial information have been reasonably prepared by the Company and/or transaction partner, as applicable, on a basis reflecting the best currently available information and the Companys and prospective transaction partners judgments and estimates. Further, Hovde has assumed that such forecasts would be realized in the amounts and at the times contemplated thereby. Hovde has not performed a review or an appraisal of the Companys or prospective transaction partners loans, investments and other assets or liabilities and has not opined on the adequacy of the Companys or prospective transaction partners reserves, its or their viability or ability to operate as a going concern in any manner, or the fairness of any transaction or corporate or accounting actions or business plans that the Company or transaction partner has consummated, or may be contemplating or pursuing in the future, and nothing in this Presentation shall be construed as such. The accompanying material does not, and any opinion provided by Hovde will not (i) address the merits of the underlying business decision of the Special Committee, the Board of Directors or the Company or any other party to the proposed Merger to enter into the proposed Merger versus any alternative strategy or transaction; or (ii) create any fiduciary duty on the part of Hovde to any party.
The Company shall not construe any of the information contained in this presentation as any tax, legal, regulatory, or accounting advice. The Company should seek and rely on the advice of its own independent tax, legal, and/or accounting advisors for such matters. No representation or warranty is being made hereunder by Hovde that any analyses contained herein comply with any tax or accounting rules, regulations, statements or principles, or other requirements or standards, and Hovde expressly disclaims any and all representations or warranties in connection therewith. Further, nothing contained in this Presentation is or shall be deemed to be, or construed as any advice or recommendation to the Company or any other party (including any shareholders thereof) as to whether or not the Company or any other party (including any shareholders thereof) should enter into any transaction(s), or take any impairments, charge-offs or any other accounting, corporate, investment, or financial action in connection therewith.
The analyses and other information contained in this Presentation are for internal use by the Special Committee only and are not intended, and may not be referenced or used by the Company in, or as the basis for, any reports or filings to or with any third parties (including without limitation, any public filings and/or audit reports), without the express written consent of Hovde. Hovde will not undertake to reaffirm or revise any valuations, advice or analyses or otherwise comment upon any events occurring or information that becomes available after the date of the valuation and analyses contemplated hereby.
2
|
TABLE OF CONTENTS
I Overview
II Equity Markets Overview
III Capital Structure and Ownership
IV Bluegreen Valuation Analysis
V BBX Valuation Analysis
VI Valuation Summary
VII Appendix
|
I OVERVIEW
|
OVERVIEW OF ENGAGEMENT AND PROPOSED MERGER
The Engagement
Hovde was retained by the Special Committee of BBX Capital to serve as its independent financial advisor in connection with the proposed Merger (as defined below). Specifically, Hovde has been asked to solely provide an opinion (the Opinion) to the Special Committee as to the fairness, from a financial point of view, of the Merger Consideration (as defined below) in connection with the Merger.
The Proposed Merger
Hovde understands that BFC Financial Corporation, a Florida corporation (BFC), BBX Merger Subsidiary LLC, a Florida limited liability company and wholly owned subsidiary of BFC (Merger Sub), and BBX Capital Corporation, a Florida corporation (BBX Capital) are about to enter into an Agreement and Plan of Merger (the Agreement), pursuant to which BBX Capital will merge with and into Merger Sub, with Merger Sub continuing as the surviving company in the merger (the Merger).
Pursuant to the Agreement and subject to the terms, conditions and limitations set forth therein, at the Effective Time (as defined in the Agreement), by virtue of the Merger and without any action on the part of BFC, Merger Sub, BBX Capital or the holders of any of their respective securities, each share of the Class A common stock, par value $0.01 per share, of BBX Capital (BBX Capital Class A Common Stock) and the Class B common stock, par value $0.01 per share, of BBX Capital (together with BBX Capital Class A Common Stock, collectively, BBX Capital Common Stock) that is issued and outstanding immediately prior to the Effective Time (except for shares of BBX Capital Common Stock owned by BFC or Merger Sub and Dissenting Shares (as defined in the Agreement)) will be converted into the right to receive, at the election of the holder thereof, either: (i) 5.40 shares of the Class A common stock, par value $0.01 per share, of BFC (the BFC Class A Common Stock and, together with the Class B common stock, par value $0.01 per share, of BFC, collectively, BFC Common Stock)(the Per Share Stock Consideration), or (ii) $20.00 in cash (the Per Share Cash Consideration). The right of such holders, at their election, to receive either the Per Share Stock Consideration or the Per Share Cash Consideration is referred to herein as the Merger Consideration. The terms and conditions of the Merger are more fully set forth in the Agreement.
Any capitalized terms used herein and not defined shall have the definition ascribed to them in the draft Agreement dated 7/26/2016 provided by the Special Committee to Hovde
5
|
SCOPE OF ANALYSIS
During the course of our engagement and for the purposes of our analysis, and opinion, we have:
reviewed a draft of the Agreement dated July 26, 2016 (the most recent draft made available to us);
reviewed the Annual Reports on Form 10-K for each of BFC and BBX Capital for the years ended December 31, 2014 and December 31, 2015; and certain interim reports to stockholders and Quarterly Reports on Form 10-Q for each of BFC and BBX Capital for the quarter ending March 31, 2016;
reviewed certain other publicly available business and financial information concerning each of BFC, BBX Capital, and their affiliates;
reviewed certain internal information relating to the business, results of operations, financial condition and prospects of each of BFC and BBX Capital, including certain forecasts and projections relating to BFC and BBX Capital and their affiliates prepared by management of the respective entities and their affiliates;
discussed with certain members of senior management of BFC and BBX Capital, the business, results of operations, financial condition and prospects of BFC and BBX Capital and their affiliates and their assessment of the rationale for the Merger;
reviewed the relative shareholder ownership and voting interest in BBX Capital and BFC, including beneficial shareholder ownership and voting interest of BBX Capital;
reviewed the current and historical market prices and trading volumes for each of BFCs and BBX Capitals common stock;
compared the financial performance of each of BFC and BBX Capital and the prices and trading activity of each of BFCs and BBX Capitals common stock, and analyzed the financial performance of certain of BFCs and BBX Capital subsidiaries as compared to certain other publicly-traded companies Hovde deemed comparable to such entities and their securities;
reviewed the terms of recent merger, acquisition and control investment transactions, to the extent publicly available, involving companies that we considered relevant;
assessed the general economic, market and financial conditions; and
performed such other analyses, reviewed such other information and considered such other factors as Hovde deemed appropriate.
Any capitalized terms used herein and not defined shall have the definition ascribed to them in the draft Agreement dated 7/26/2016 provided by the Special Committee to Hovde
6
|
II EQUITY MARKETS OVERVIEW
|
EQUITY PERFORMANCE OVERVIEW
Percent Change
7/25/2016 2016 YTD One Year Three Year
Broad Market Indices
Dow Jones Industrials 18,570.9 6.58% 5.71% 19.38%
S&P 500 2,168.5 6.09 4.27 28.29
NASDAQ Composite 5,097.6 1.80 0.18 41.40
Russell 3000 2,358.0 6.42 3.46 27.16
Merger Parties
BBX $ 15.90 1.60% 0.25% 5.65%
BFCF 2.84(16.22)(18.16) 2.53
Relevant Peers and Indices
SNL US Specialty Lender 638.93(5.82)%(18.27)%(12.58) %
VOI Index1 252.54 10.09(15.35) 24.21
WYN $ 76.92 5.87(7.40) 25.29
IILG 17.91 14.73(17.01)(18.41)
VAC 79.15 38.98 (6.46) 76.99
MYCC 14.94(18.25)(36.01) NA
Source: Factset and SNL Financial
Market Data as of 7/25/2016
1) VOI Index equally weights IILG, MYCC, VAC, and WYN
8
|
BFC & BBX THREE YEAR STOCK PRICE
March 17, 2014: BFC announces special meeting of shareholders to be held on April 14, 2014 in which shareholders will vote on merger with BBX. BFC board urges shareholders to vote for the merger
August 30, 2013:
Earnings release for BBX and BFC. Both include detailed Bluegreen presentation
October 25, 2013: BBX and BFC announce agreement to purchase Renin for $15M
April 17, 2015: BFC announces agreement for $80M Loan from Bluegreen to finance tender offer of BBX shares
April 29, 2015:
BFC announces 6.7 million shares are tendered by shareholders 28% oversubscribed
September 4, 2015: Alan Levan & other executives exchange BBX shares for BFC shares in order for BFC to maintain 80% ownership in BBX
November 10, 2014: BFC and BBX announce dismissal of merger litigation
December 15, 2014:
Announces termination of merger between BFC and BBX
March 17, 2015: BFC announces tender offer of $20 per BBX share
December 16, 2015: Fed Interest Rate Hike
June 23, 2016:
Brexit
$15.90
$2.84
$25.00 $20.00 $15.00 $10.00
$5.00
BBX BFC
Source: Factset and SNL Financial Market data as of 7/25/2016
9
|
BFC & BBX THREE YEAR PRICE / BOOK VALUE
March 17, 2014: BFC announces special meeting of shareholders to be held on April 14, 2014 in which shareholders will vote on merger with BBX. BFC board urges shareholders to vote for the merger
April 17, 2015: BFC announces agreement for $80M Loan from Bluegreen to finance tender offer of BBX shares
April 29, 2015:
BFC announces 6.7 million shares are tendered by shareholders 28% oversubscribed
September 4, 2015: Alan Levan & other executives exchange BBX shares for BFC shares in order for BFC to maintain 80% ownership in BBX
August 30, 2013:
Earnings release for BBX and BFC. Both include detailed Bluegreen presentation
October 25, 2013: BBX and BFC announce agreement to purchase Renin for $15M
November 10, 2014: BFC and BBX announce dismissal of merger litigation
December 15, 2014:
Announces termination of merger between BFC and BBX
March 17, 2015: BFC announces tender offer of $20 per BBX share
December 16, 2015: Fed Interest Rate Hike
June 23, 2016:
Brexit
0.77x
0.62x
1.60x 1.40x 1.20x 1.00x 0.80x 0.60x 0.40x 0.20x 0.00x
BBX BFC
Source: Factset and SNL Financial Market data as of 7/25/2016
10
|
III CAPITAL STRUCTURE AND OWNERSHIP
|
BBX CAPITAL STRUCTURE
December 31, March 31,
(Dollars in thousands, except per share values) 2014 2015 2016
Goodwill and Intangibles Assets:
Goodwill and Intangible Assets $ 15,817 $ 15,812 $ 15,608
Notes Payable
Wells Fargo Capital Finance $ 8,028 $ 8,071 $ 8,798
Anastasia Note 7,214 5,330 5,353
Iberia Line of Credit4,997 4,997
Centennial BankHoffmans 1,645 1,613 1,605
Centennial BankKencraft995 995
Holdback Notes and Other 1,036 415 413
Total Notes Payable $ 17,923 $ 21,421 $ 22,161
Shareholders Equity
Preferred Stock: $0.01 par value, 10,000,000 shares authorized $$$ -
Class A Common Stock$0.01 par value, 25,000,000 shares authorized 160 162 162
Class B Common Stock$0.01 par value, 1,800,000 shares authorized 2 2 2
Additional Paid-in Capital 347,937 350,878 352,519
Accumulated Deficit(38,396)(16,622)(16,935)
Accumulated Other Comprehensive Income 85 384 289
Total Shareholders Equity $ 309,788 $ 334,804 $ 336,037
Class A Shares Outstanding 15,977,322 16,199,145 16,199,145
Class B Shares Outstanding 195,045 195,045 195,045
Total Common Shares Outstanding 16,172,367 16,394,190 16,394,190
Book Value / Share $ 19.16 $ 20.42 $ 20.50
Tangible Book Value 1 / Share 18.18 19.46 19.55
Source: Capital IQ, SNL Financial and BBX Company Filings
1) Tangible book value equals book value less goodwill and intangibles
12
|
BFC CAPITAL STRUCTURE
December 31, March 31,
(Dollars in thousands, except per share values) 2014 2015 2016
Goodwill and Intangibles Assets:
Goodwill and Intangible Assets $ 79,730 $ 77,789 $ 77,528
Notes Payable & Trust Preferred Securities
Total Notes PayableBluegreen $ 129,173 $ 101,584 $ 97,741
Total Notes PayableBBX 17,923 21,421 22,161
Total Notes Payable $ 147,096 $ 123,005 $ 119,902
Trust Preferred SecuritiesBluegreen 110,827 110,827 110,827
Trust Preferred SecuritiesWoodbridge 85,052 85,052 85,052
Total Trust Preferred 195,879 195,879 195,879
Total Notes Payable & Trust Preferred Securities $ 342,975 $ 318,884 $ 315,781
Shareholders Equity
Preferred Stock: $0.01 par value, 10,000,000 shares authorized $$$ -
Class A Common Stock$0.01 par value, 150,000,000 shares authorized 733 732 732
Class B Common Stock$0.01 par value, 20,000,000 shares authorized 102 113 113
Additional Paid-in Capital 142,058 143,231 146,203
Accumulated Earnings 109,660 232,134 237,616
Accumulated Other Comprehensive Income 353 616 511
Total Shareholders Equity $ 252,906 $ 376,826 $ 385,175
Class A Shares Outstanding 73,307,012 73,211,519 73,211,519
Class B Shares Outstanding 10,168,105 11,346,336 11,346,336
Total Common Shares Outstanding 83,475,117 84,557,855 84,557,855
Book Value / Share $ 3.03 $ 4.46 $ 4.56
Tangible Book Value 1 / Share 2.07 3.54 3.64
Source: Capital IQ, SNL Financial and BFC Company Filings
1) Tangible book value equals book value less goodwill and intangibles
13
|
DIRECT AND BENEFICIAL OWNERSHIP INTEREST OF BBX CAPITAL + SUBSIDIARIES
Current Direct Ownership1
BBX Shareholders
Other than BFC BFC Financial BBX Capital
Ownership of:
BBX Capital 18.74% 81.26%
BFC Financial
Renin Holdings 19.00 81.00%
CAM 100.00
FAR 100.00
Hoffmans 100.00
BBX Sweet 100.00
Woodbridge / Bluegreen 54.00 46.00
Current Beneficial Ownership1
BBX Shareholders
Other than BFC BFC Financial BBX Capital
Ownership of:
BBX Capital 18.74% 81.26% 100.00%
BFC Financial 0.00 100.00 0.00
Renin Holdings 15.18 84.82 81.00
CAM 18.74 81.26 100.00
FAR 18.74 81.26 100.00
Hoffmans 18.74 81.26 100.00
BBX Sweet 18.74 81.26 100.00
Woodbridge / Bluegreen 8.62 91.38 46.00
ource: Capital IQ, BBX and BFC Company Filings and BBX and BFC Company Management
1) Ownership as of 3/31/2016
14
|
BBX INSTITUTIONAL OWNERSHIP
TOP 10 INSTITUTIONAL SHAREHOLDERS
(Share count in thousands)
Trishield Capital Management LLC
799.8 52.60%
Sterling Capital Management LLC
28.3
1.86%
BlackRock Inc. Northern Trust Global 199.8 Investments 13.14% 34.4
2.27%
BNY Asset Management 34.9
2.29% Dimensional Fund Advisors LP
State Street Corp. 160.4 38.5 10.55%
2.53% Gator Capital Management LLC
Vanguard Group Inc. 113.4 47.1 Geode Capital Management LLC 7.46%
3.10%
63.8
4.20%
% of Class A
Class A Shares
Current Shareholders Shares Outstanding
Controlling Shareholder
BFC Financial 13,126,396 81.03 %
Top 15 Institutional Shareholders
Trishield Capital Management LLC 799,778 4.94 %
BlackRock Inc. 199,814 1.23
Dimensional Fund Advisors LP 160,442 0.99
Gator Capital Management LLC 113,375 0.70
Geode Capital Management LLC 63,779 0.39
Vanguard Group Inc. 47,145 0.29
State Street Corp. 38,453 0.24
BNY Asset Management 34,865 0.22
Northern Trust Global Investments 34,442 0.21
Sterling Capital Management LLC 28,261 0.17
TIAA 22,757 0.14
John Deere Pension Trust 11,524 0.07
Apollo Global Management LLC 5,873 0.04
California State Teachers Retirement System 5,850 0.04
Lincoln Investment Advisors Corp. 4,108 0.03
1,570,466 9.70
Total Institutional Shareholders 1,593,122 9.83 %
Other Shareholders 1,479,627 9.13
Total Outstanding 16,199,145
Options Outstanding 7,016
Restricted Stock Awards 1,429,152
Source: Capital IQ
Share count as of 7/25/2016
Note: Excludes 195,045 shares of Class B Shares owned by BFC Financial
15
|
BBX-BFC CROSS-OWNERSHIP ANALYSIS
BBX Capital Corporation BFC Financial Corporation Beneficial BBX Ownership
Beneficial Beneficial Beneficial BBX Beneficial BBX
Class A Class B Economic Voting Class A Class B Economic Voting BBX Class A BBX Class B Economic Voting
Holder Shares Shares Interest (%) Control (%) Shares Shares Interest (%) Control (%) Ownership Ownership Interest (%) Control (%)
BFC Financial Corporation (OTCPK:BFCF) 13,126,396 195,045 81.26 89.95
Abdo, John E. 56,5010.34 0.18 3,503,026 5,488,224 10.19 34.68 1,394,449 19,881 8.61 31.38
Levan Partners LLC 5,011,048 707,882 6.48 5.80 851,008 12,645 5.25 5.22
Trishield Capital Management LLC 799,7784.88 2.62 3,821,1004.33 1.11 1,368,379 8,449 8.45 3.62
Wertheim O.D., Herbert A. 3,968,157 416,448 4.97 3.71 652,453 9,695 4.03 3.34
Dvorkin, How ard S. 3,695,2454.19 1.08 549,873 8,171 3.39 0.97
Levan, Alan B. 18,6040.11 0.06 1,507,045 2,115,822 4.11 13.41 557,707 8,011 3.44 12.13
Knightsbridge Asset Management LLC 3,275,6903.71 0.95 487,441 7,243 3.01 0.86
Wise, Seth M. 12,0430.07 0.04 556,337 1,107,217 1.89 6.95 259,589 3,678 1.60 6.29
Levan, Jarett S. 12,3460.08 0.04 385,796 1,108,815 1.69 6.91 234,752 3,305 1.45 6.26
Florida Partners Corp. 1,270,294 133,314 1.59 1.19 208,865 3,104 1.29 1.07
Dimensional Fund Advisors LP 160,4420.98 0.52 107,3810.12 0.03 176,421 237 1.09 0.55
BlackRock, Inc. (NYSE:BLK) 199,8141.22 0.65 199,8141.23 0.65
Grelle, John K. 132,5950.15 0.04 19,731 293 0.12 0.03
Boston Private Wealth LLC 115,0070.13 0.03 17,114 254 0.11 0.03
Gator Capital Management, LLC 113,3750.69 0.37 113,3750.70 0.37
Geode Capital Management, LLC 63,7790.39 0.21 63,7790.39 0.21
Nicholson, William R. 2,3940.01 0.01 60,1730.07 0.02 11,348 133 0.07 0.02
Levy, Joel 61,5580.07 0.02 9,160 136 0.06 0.02
Levy Ph.D., Alan J. 51,7830.06 0.02 7,706 114 0.05 0.01
Dornbush Esq., Darw in C. 50,0870.06 0.01 7,453 111 0.05 0.01
The Vanguard Group, Inc. 47,1450.29 0.15 47,1450.29 0.15
Lopez CPA, Raymond S. 100.00 0.0039,000 0.04 0.24 5,813 86 0.04 0.22
State Street Global Advisors, Inc. 38,4530.23 0.13 38,4530.24 0.13
BNY Mellon Asset Management 34,8650.21 0.11 34,8650.22 0.11
Northern Trust Global Investments 34,4420.21 0.11 34,4420.21 0.11
Holzmann Ph.D., Oscar J. 13,138 20,290 0.04 0.13 4,974 74 0.03 0.12
Sterling Capital Management LLC 28,2610.17 0.09 28,2610.17 0.09
Teachers Insurance and Annuity Association of America 22,7570.14 0.07 22,7570.14 0.07
Levan, Susie C. 11,440 1,200 0.01 0.01 1,881 28 0.01 0.01
William Blair Investment Management, LLC 12,5000.01 0.00 1,860 28 0.01 0.00
Other BBX Shareholders 1,352,3658.25 4.42 1,352,3658.35 4.42
Other BFC Shareholders 47,883,419 1,580,716 56.07 23.65 7,360,537 109,370 45.44 21.27
Total 16,199,145 195,045 100.00 100.00 75,492,819 12,718,928 100.00 100.00 16,199,145 195,045 100.00 100.00
Source: Capital IQ
Share count as of 7/25/2016
16
|
IV BLUEGREEN VALUATION ANALYSIS
|
BLUEGREEN VALUATION METHODOLOGY
Hovde utilized the following methodologies to determine a range of values for Bluegreen:
Market Approach
Select Public Companies Analysis
Hovde selected four (4) publicly traded companies that it deemed relevant to its analysis.
Hovde analyzed financial performance of each of the selected public companies and then analyzed their respective trading multiples.
Hovde analyzed a number of factors in comparing Bluegreen to the selected public companies, including historical and forecasted growth in revenue and profits, profit margins, and other characteristics that we deemed relevant.
None of the companies utilized for comparative purposes in the following analysis are directly comparable to Bluegreen. Hovde does not have access to non-public information of any of the companies used for comparative purposes. Accordingly, a complete valuation analysis of Bluegreen and the proposed Merger cannot rely solely upon a quantitative review of the selected companies, and involves complex considerations and judgments concerning differences in financial and operating characteristics of such companies, as well as other factors that could affect their value relative to that of Bluegreen. Therefore, the Selected Public Companies Analysis is subject to certain limitations.
18
|
SELECT PUBLIC COMPANIES ANALYSIS
(Dollars in millions, except per share values) % of Net Debt Adjusted LTM2 Adjusted 2016 Estimates3
52 Wk Div. Payout Market to Mkt Net Net Compa Ticker Price High Yield Ratio Cap EV1 Cap EBITDA EBIT Income EBITDA EBIT Income
WYN $ 77. 0 91.11 % 2. 59 % 32.7 % $8,621. 4 $ 11,612. 4 34.7 % $ 1,176.0 $936. 0 $586. 0 $ 1,303.8 $ 1,052.8 $ 642.7
4, 5
IILG 17.94 81.62 2.72 38.1 2,307.1 2,738.1 20.1 157.5 137.7 70.2 337.0 304.0 119.69
VAC 79.27 90.13 1.57 27.5 2,139.2 2,001.2 (6.5) 253.4 229.5 115.4 259.7 285.4 132.48
6, MYCC 7 14.91 62.18 3. 46 NM 977.5 1,985.3 102.0 196.0 90.5 (7.9) 247.0 117.0 NA
$ 143.1 $ 133.8 $ 83.5 $ 151.4 $ 141.2 $ 78.1
Source: Capital IQ and BBX and BFC Company Filings
Note: The above companies may not be comparable to Bluegreen and publicly available information may not be calculated on the same basis as Bluegreen
1) Enterprise Value is adjusted for securitized vacation ownership debt, in line with industry standards
2) LTM Financial Data as of 3/31/2016; EBITDA and EBIT are adjusted for interest related to securitized vacation ownership debt, in line with industry standards
3) 2016 Financial Data Estimates as of 7/25/2016; EBITDA and EBIT are adjusted for interest related to securitized vacation ownership debt, in line with industry standards
4) IILG 2016 Estimates from MKM Partners and Oppenheimer IILG equity research reports dated 4/14/2016 and 3/9/2016, respectively
5) IILG acquired Vistana in a transaction that closed 5/11/2016
6) Bluegreen LTM Financial Data derived from BBX and BFC SEC Filings
luegreen 2016 Financial Data Estimates provided by BBX Company Management
19)
|
SELECT PUBLIC COMPANIES ANALYSIS (CONTD)
(Dollars in millions) Adjusted LTM Multiples1 Adjusted 2016E Multiples2
EV / LTM EV / LTM P / LTM EV / 16E EV / 16E P / 16E Com EBITDA EBIT Earnings EBITDA EBIT Earnings
9.87 x 12.41 x 15.39 x 8.91 x 11.03 x 13.27 x 17.39 19.89 14.54 8.12 9.01 17.20
7.90 8.72 18.95 7.70 7.01 15.87
10.13 21.93 NM 8.04 16.96 NA
Minimum 7.90 x 8.72 x 14.54 x 7.70 x 7.01 x 13.27 x 25th Percentile 8.39 9.64 14.54 7.79 7.51 13.27 Median 10.00 16.15 15.39 8.08 10.02 15.87 75th Percentile 15.57 21.42 18.95 8.71 15.48 17.20 Maximum 17.39 21.93 18.95 8.91 16.96 17.20
$ 143.1 $ 133.8 $ 83.5 $ 151.4 $ 141.2 $ 78.1
Implied Enterprise Value (Median) $ 1,431.2 $ 2,160.2 $ 1,394.5 $ 1,223.4 $ 1,414.6 $ 1,347.8 Less: Net Debt 4, 5 60.0 60.0 60.0 60.0 60.0 60.0 Less: Minority Interest 6 48.7 48.7 48.7 48.7 48.7 48.7 Implied Market Capitalization 7 $ 1,322.42 $ 2,051.45 $ 1,285.78 $ 1,114.64 $ 1,305.85 $ 1,239.09
Source: Capital IQ
Market data as of 7/25/2016; Financial data as of 3/31/2016
1) LTM Financial Data as of 3/31/2016; EBITDA and EBIT are adjusted for interest related to securitized vacation ownership debt, in line with industry standards
2) 2016 Financial Data Estimates as of 7/25/2016; EBITDA and EBIT are adjusted for interest related to securitized vacation ownership debt, in line with industry standards
3) IILG 2016E multiples estimated calculated from projections provided by MKM Partners and Oppenheimer dated 4/14/2016 and 3/9/2016, respectively; IILG acquired Vistana in a transaction that closed 5/11/2016
4) Net Debt and minority interest derived from public filings for BBX and BFC and projections provided by BBX Company Management
5) Net Debt includes notes and mortgage notes payable and other borrowings and junior subordinated debentures less non-restricted cash
6) Minority interest is noncontrolling interest in Big Cedar joint venture
7) Implied Market Capitalization is enterprise value less net debt and minority interest
20
|
V BBX VALUATION ANALYSIS
|
BBX VALUATION METHODOLOGY
Hovde utilized the following methodologies to determine a range of values for BBX:
Market Approach
Exchange Ratio and Valuation Based on Relative Book Value
Based on the relative book value of BBX and BFC at March 31, 2016 and each companys volume weighted average price over 5, 20, 30, 60, 90, 180, and 360 days. Hovde calculated the implied per share values for BBX as well as implied exchange ratios between BBX and BFC
Exchange Ratio and Valuation Based on Relative Volume Weighted Stock Prices
Based on volume weighted average prices over 5, 20, 30, 60, 90, 180, and 360 days. Hovde calculated implied per share values for BBX as well as implied exchange ratios between BBX and BFC assuming BFCs closing stock price of $2.84 as of July 25, 2016 Comparable Transactions
Majority Shareholder Purchasing Remaining Interest in BBX Capital
Hovde compared BFCs cash offer of $20 per BBX share to the premium to market paid one day, one week, and one month prior to announcement by majority shareholders in similar transactions
Exchange ratio and valuation based on implied Bluegreen market valuation
Asset Value Approach
Sum-of-the-Parts Valuation
Hovde estimated the implied value of BBX by analyzing individual parts of BBX and BFC
Bluegreen: Based on a market approach Hovde estimated the implied value of Bluegreen (See Bluegreen Valuation Methodology)
Real Estate Owned: Hovde estimated the implied value of real estate owned in two manners: (1) the carrying value of real estate owned as provided by management, and (2) the appraised value of real estate owned as provided by management
Real Estate Development and Joint Ventures: Hovde estimated the implied value of real estate development and joint ventures in two manners: (1) the carrying value of real estate owned as provided by management, and (2) based on discounting future cash flows by managements 15% IRR hurdle for such projects
Other Holdings: Hovde assumed other holdings of BBX and BFC to be valued at book value
Note: The implied values resulting from these methodologies may not represent the actual price, or the highest or best price, that could be obtained by BBX in the Merger or in a sale, merger, combination, or other corporate transaction with a third party. Expenses and operating results were not considered other than for Bluegreen. Taxes on sale or liquidation were not considered for any entity. The values indicated herein were not intended to be a standalone valuation of BBX.
22
|
RELATIVE BOOK VALUEIMPLIED EXCHANGE RATIO AND BBX VALUATION
$15.00 5.00x $14.50 4.90x $14.00 $13.52 4.80x $13.50 4.70x $13.00 4.76x $12.77 4.60x
Share $12.47 $12.60 $12.59 per $12.50 $12.03 $12.18 4.50x Exchange $11.86 $12.00 4.50x 4.40x
4.44x 4.43x
Value $11.50 4.39x 4.30x Ratio $11.00 4.29x 4.20x
4.24x $10.50 4.18x 4.10x $10.00 4.00x
Volume Weighted Average Price
Book Value Per Share
BFC BBX Exchange Ratio
3/31/2016 $4.56 $20.50 4.50 x
Implied BBX Implied BFC VWAP Value Per Share1 Exchange Ratio2
7/25/2016 $2.84 $12.77 4.50 x
5 Day 2.80 12.59 4.43
20 Day 2.80 12.60 4.44
30 Day 2.71 12.18 4.29
60 Day 2.64 11.86 4.18
90 Day 2.68 12.03 4.24 180 Day 2.77 12.47 4.39 360 Day 3.01 13.52 4.76
Implied BBX Value Per Share Range1 $11.86$13.52 Implied Exchange Ratio Range2 4.18x4.76x
Source: Factset and BBX and BFC Company Filings Market data as of 7/25/2016; Financial Data as of 3/31/2016
1) Implied BBX Value Per Share equals BFC VWAP multiplied by the Exchange Ratio; Values are rounded to the nears one cent
2) Implied Exchange Ratio equals Implied BBX Value Per Share divided by BFC closing stock price of $2.84 as of 7/25/2016; Values are rounded to the nears one-hundredth
23
|
VOLUME WEIGHTED PRICE IMPLIED EXCHANGE RATIO AND BBX VALUATION
$20.00 5.60x 5.70x
5.60x 5.58x
5.54x 5.60x $18.00 5.46x 5.49x 5.50x $15.89 $15.83 $15.90 $16.00 $15.74 $15.51 $15.59 5.40x Share $14.53 $14.65 per $14.00 5.30x Exchange
5.20x
Value $12.00 5.16x 5.10x Ratio
5.12x 5.00x $10.00
4.90x
$8.00 4.80x
Volume Weighted Average Price
VWAP Volume Implied Implied BBX BBX BFC BBX BFC Exchange Ratio1 Value Per Share2 BFC Stock Price as of 7/25/2016 $2.84
5 Day $15.62 $2.80 18,190 199,921 5.58 x $15.83
20 Day 15.39 2.80 63,244 554,381 5.49 15.59
30 Day 14.80 2.71 168,702 929,626 5.46 15.51
60 Day 14.77 2.64 298,015 2,319,117 5.60 15.89
90 Day 14.84 2.68 417,537 3,515,355 5.54 15.74 180 Day 14.31 2.77 980,345 6,781,971 5.16 14.65 360 Day 15.38 3.01 2,575,019 12,784,612 5.12 14.53
Implied BBX Value Per Share Range2 $14.53$15.89 Implied Exchange Ratio Range1 5.12x5.60x
Source: Factset
Market data as of 7/25/2016
1) Implied Exchange Ratio equals BBX volume weighted average price divided by BFC volume weighted average price; Values are rounded to the nearest one-hundredth
2) Implied BBX Value Per Share equals BFC Stock Price multiplied by the Exchange Ratio; BFC closing stock price of $2.84 as of 7/25/2016; Values are rounded to the nearest one cent
24
|
SELECT TRANSACTIONS: MAJORITY SHAREHOLDER PURCHASING REMAINING SHARES1
(dollars in millions, except per share data)
Data Deal LTM LTM Percent % Premium to Market
Announced Target Acquirer Value Tot. Rev.1 EBITDA1 Sought 1 Day 1 Week 1 Month
5/31/2016 Rose Rock Midstream LP SemGroup Corp. $ 391.46 $ 901.83 $ 70.95 43.80 % 0.01 % 0.42 % 60.01 % 3/7/2016 National Interstate Corp. Multiple 311.23 633.49 NA 48.90 41.53 43.76 30.61 1/15/2016 Synutra International, Inc. Beams Power Investment Ltd. 125.22 389.10 79.5 37.05 54.31 48.49 21.11 1/29/2015 Books-A-Million, Inc. Books-A-Million, Inc. /Management/ 21.69 470.03 17.7 43.32 91.18 92.31 101.11 12/2/2014 QEP Midstream Partners LP Tesoro Logistics LP 381.70 121.60 90.6 42.20 10.67 (0.97) (4.24) 10/1/2014 Oiltanking Partners LP Enterprise Products Partners LP 1,385.50 255.58 175.1 33.98 (1.09) (2.06) (0.00) 5/7/2013 Pioneer Southwest Energy Partners LP Pioneer Natural Resources Co. 694.13 182.80 106.3 47.60 57.05 55.85 67.69 6/16/2011 C&D Technologies, Inc. Angelo, Gordon & Co. LP 52.05 358.44 17.5 35.00 18.33 17.47 28.29 2/23/2011 Duncan Energy Partners LP Enterprise Products Partners LP 1,051.06 1115.10 270.4 41.50 34.59 34.43 36.69 8/26/2010 Wesco Financial Corp. Berkshire Hathaway, Inc. 545.48 745.87 52.3 19.90 18.55 18.10 14.58
BBX Capital 25.79 % 28.21 % 38.41 %
Minimum (1.09) % (2.06) % (4.24) % 25th Percentile 8.00 0.07 10.94 Median 26.57 26.26 29.45 75th Percentile 51.11 47.31 54.18 Maximum 91.18 92.31 101.11
BBX Stock Price $15.90 $15.60 $14.45
Implied Per Share Value
Minimum $15.73 $15.28 $13.84 25th Percentile 17.17 15.61 16.03 Median 20.13 19.70 18.71 75th Percentile 24.03 22.98 22.28 Source: Factset and 30.40 30.00 29.06
Capital IQ Maximum
Transaction Market Data as of date of announcement; BBX Capital Market Data as of 7/25/2016
1) Includes deals in which a majority shareholder sought to acquire the remaining minority interest in the target company; excludes deals with the following criteria: (a) target revenue greater than $1.5 billion; (b) target LTM EBITDA less than $0; (c) tender offers; (d) short-form mergers; (e) deals in which the percent sought is less than 10%, (f) deals for which target financial information is unavailable; (g) deals in which premium-to-market information is unavailable or not meaningful
25
|
RELATIVE VALUATION BASED ON IMPLIED BLUEGREEN MARKET VALUATION
Hovde analyzed the implied market valuation of Bluegreen based on the market capitalizations of BBX and BFC and the relative ownership of Bluegreen by each company.
Based solely on the market prices of BBX and BFC and each companys respective ownership of Bluegreen, Hovde estimated implied values of Bluegreen based on the current trading prices of BBX and BFC and assuming Bluegreen comprised between 50% and 100% of the overall equity value of each company.
Since the market ascribed more value to Bluegreen within BBXs public stock price, we estimated the market capitalization of BFC using Bluegreens value within BBXs stock price. This allows for an apples-to-apples comparison of the value of Bluegreen within BBX and BFCs stock prices; however, it does not address the different capitalization structures or other business operations BFC and BBX, respectively, which could materially affect the stock values.
Current Market Values
BBX BFC
Current Price Per Share $15.90 $2.84 Shares Outstanding1 16,394,190 88,211,747 Current Market Capitalization (mm) $257.6 $250.5 Ownership of Bluegreen2 46.0% 91.4%
Implied Market Value of Bluegreen Based on Percentage of Market Capitalization ($mm) Bluegreen as % of Grossed-Up BFC
Mkt Cap BBXBluegreen BFCBluegreen Mkt Cap
100.0% $559.9 $274.2 $511.7 75.0% $419.9 $205.6 $383.7 50.0% $280.0 $137.1 $255.8
Estimated Prices Per Share Assuming Gross-Up of Bluegreen Value
Bluegreen as % of BBX Price Per Implied BFC Price Implied Exchange Implied Per Share BBX Mkt Cap Share Per Share Ratios Valuation
100.0% $15.90 $5.80 2.74x $7.79 75.0% $15.90 $4.35 3.66x $10.38 50.0% $15.90 $2.90 5.48x $15.57
Implied BBX Value Per Share Range $7.64$15.28
Implied Exchange Ratio Range 2.74x5.48x
Source: Capital IQ Market data as of 7/25/2016
1) BBX and BFC shares outstanding as of 7/25/2016; includes both Class A and Class B shares
2) Ownership of Bluegreen includes both direct ownership and indirect ownership; BFC owns 54.0% of Bluegreen directly and 81.3% of BBX directly; BBX owns 46.0% of Bluegreen directly; BFC ownership of Bluegreen through direct and indirect ownership equals 91.4%
26
|
SUM-OF-THE-PARTS ANALYSIS
BBX BFC
Low Range High Range Low Range High Range BBX BFC
Ownership Total Equity BBX Equity Total Equity BBX Equity Ownership Total Equity BFC Equity Total Equity BFC Equity Interest Value Value Value Value Interest Value Value Value Value
Book Value as of 3/31/2016 $ 336.0 $ 336.0 $ 385.2 $ 385.2
Bluegreen 46.0 % 91.4 %
25th Percentile EV/ EBITDA Multiple1 $ 1,070.3 $ 492.3 $ $ $ 1,070.3 $ 978.1 $ $ -75th Percentile EV/ EBITDA Multiple1 1,210.1 556.6 1,210.1 1,105.9
Less: Carrying Value (250.1) (115.1) (250.1) (115.1) (250.1) (228.6) (250.1) (228.6) Bluegreen Adjustment $ 820.1 $ 377.3 $ 960.0 $ 441.6 $ 820.1 $ 749.5 $ 960.0 $ 877.3 Real Estate Owned 100.0 % 81.3 %
Value Based on Carrying Value2 $ 65.1 $ 65.1 $ $ $ 65.1 $ 52.9 $ $ -Value Based on Appraised Value2 94.7 94.7 94.7 77.0
Less: Carrying Value (65.1) (65.1) (65.1) (65.1) (65.1) (52.9) (65.1) (52.9) Real Estate Owned Adjustment $ $ $ 29.6 $ 29.6 $ $ $ 29.6 $ 24.1 Real Estate Development & Joint Ventures 100.0 % 81.3 %
Value Based on Carrying Value3 $ 50.8 $ 50.8 $ $ $ 50.8 $ 41.2 $ $ -Value Based on Projected Cash Flows3 96.9 96.9 96.9 78.7
Less: Carrying Value (50.8) (50.8) (50.8) (50.8) (50.8) (41.2) (50.8) (41.2) Real Estate Dev. & JV Adjustment $ $ $ 46.1 $ 46.1 $ $ $ 46.1 $ 37.5 Total Equity Value $ 820.1 $ 713.3 $ 1,035.7 $ 853.3 $ 820.1 $ 1,134.7 $ 1,035.7 $ 1,324.0 Shares Outstanding4 16.4 16.4 84.6 84.6
Implied Value Per Share $ 43.51 $ 52.05 $ 13.42 $ 15.66 Implied Relative Valuation 3.24 x 3.32 x Implied BBX Value Per Share (BFC Current Price5 X Exchange Ratio) $ 9.11 $ 9.34
Source: BBX and BFC Company Financials and BBX and BFC Company Management
Note: Book Value assumed for holdings not shown in Sum-Of-The-Parts analysis for BBX and BFC
1) Bluegreen Equity Value based on Percentile EV / 16E EBITDA Multiple from Public Comp. Analysis
2) BBX and BFC Carrying Value / Appraised Value of Real Estate Owned provided by BBX and BFC Company Management; as of 3/31/2016
3) BBX and BFC Carrying Value of Real Estate Development Projects provided by BBX and BFC Company Management; Value based on projected cash flows assumes a 15% discount rate (managements hurdle rate for such projects; as of 3/31/2016)
4) BBX and BFC shares outstanding as of 3/31/2016; includes both Class A and Class B shares
5) BFC closing stock price of $2.84 as of 7/25/2016
27
|
VI VALUATION SUMMARY
|
PER SHARE STOCK CONSIDERATION ANALYSIS
Fixed Implied BBX BFCF Stock Price Change Exchange Value per Pricing Event Price1 Sensitivity Ratio Share1 Notes
Per Share Cash Consideration $3.70 30.41 % 5.40x $20.00 BFC Per Share Price Cash Consideration of $20.00
3.83 35.00 5.40 20.70 BFCF 52wk High (10/22/2015) 3.80 33.80 5.40 20.52
3.69 30.00 5.40 19.94
3.55 25.00 5.40 19.17
3.41 20.00 5.40 18.40
3.27 15.00 5.40 17.64
3.12 10.00 5.40 16.87
2.98 5.00 5.40 16.10
2.94 3.68 5.40 15.90 Implied BFCF Per Share Price Based on BBX Market Value as of 7/25 BFCF Closing Price (07/25/16) 2.84 0.00 5.40 15.34 Per Share Stock Consideration based on BFCF Market Value as of 7/25
2.70 (5.00) 5.40 14.57
2.56 (10.00) 5.40 13.80 BFCF 52wk Low (2/23/2016) 2.50 (11.97) 5.40 13.50
2.41 (15.00) 5.40 13.04
2.27 (20.00) 5.40 12.27
2.13 (25.00) 5.40 11.50
1.99 (30.00) 5.40 10.74
1.85 (35.00) 5.40 9.97
1.70 (40.00) 5.40 9.20
Data as of 7/25/2016
We note that, as of the date of this presentation, the aggregate market price of the Per Share Stock Consideration is substantially less than the value of the Per Share Cash Consideration. Under the Agreement, a holder of a No-Election Share will receive the Per Share Cash Consideration. We assume that a holder of BBX Capital Common Stock who elects to receive the Per Share Stock Consideration is willing and able to accept the risk that the Per Share Stock Consideration might not be equal to or exceed, and might be substantially less than, the value of the Per Share Cash Consideration at the time of the Merger or at any time in the future.
1) Values are rounded to the nearest one cent
29
|
BBX VALUATION SUMMARY
$35.00
$30.40 $30.00 $30.00 $29.06
$25.00 Per Share Cash Consideration: $20.00 $20.00 $15.90 $15.28 $15.00 $15.73 $15.28 $13.52 $14.53 $13.84 $11.86 $10.00 $9. `34
$9.11
$7.64
$5.00
1 Day 1 Week 1 Month Book Value VWAP Market Value Sum-Of-The-Parts
Market Premium1 Relative
Data as of 7/25/2016
1) Market Premium reflects BBX closing stock price as of 7/25/2016 X one plus the minimum and maximum premium paid from Majority Shareholder Purchasing Remaining Shares analysis
30
|
BBX EXCHANGE RATIO SUMMARY
6.00x
Per Share Stock
5.60x
5.48x Consideration
5.40x
5.00x 5.12x
4.76x
4.18x
4.00x
3.32x
3.24x
3.00x
2.74x
2.00x
Book Value VWAP Market Value Sum-Of-The-Parts
Relative
Data as of 7/25/2016
31
|
VII APPENDIX: ASSUMPTIONS, QUALIFICATIONS, AND LIMITING CONDITIONS
|
ASSUMPTIONS, QUALIFICATIONS, AND LIMITING CONDITIONS
If issued, our Opinion letter will include assumptions, qualifications and limiting conditions similar to the following. This is not meant to be a complete list of the assumptions, qualifications and limiting conditions which will be included in our Opinion letter, if rendered.
Assumptions and Reliance In performing its analyses with respect to the proposed Merger, Hovde, with the Special Committees consent and without independent verification:
Relied upon the accuracy, completeness, and fair presentation of all information, data, advice, opinions and representations obtained from public sources or provided to it from private sources, including BBX Capital and BFCs management, and did not independently verify such information (or assume any responsibility or liability for independently verifying such information);
Relied upon the fact that the Special Committee, the Board of Directors and BBX Capital have been advised by counsel as to all legal matters with respect to the proposed Merger, including whether all procedures required by law to be taken in connection with the proposed Merger have been (or will be) duly, validly and timely taken;
Assumed that any estimates, evaluations, forecasts and projections including, without limitation, the management projections of each of BBX
Capital and BFC and their affiliates, furnished to Hovde were reasonably prepared and based upon the best currently available information and good faith judgement of the person furnishing the same, and Hovde has relied upon such estimates, evaluations, forecasts and projections in performing its analysis and expresses no view or opinion with respect to such estimates, evaluations, forecasts or projections or their underlying assumptions;
Assumed that (i) the management projections are each of BFCs and BBX Capitals most current financial projections available and are considered by the management of each of the same to be its best estimates of such parties future financial performance and financial results, subject to the uncertainty, assumptions and approximation inherent in any projections, (ii) the assumptions supporting the parties management projections are both reasonable and achievable as of the date hereof and have been reviewed and approved by management of such parties, and (iii) the management of BFC and BBX Capital do not know of any facts that have occurred since the date their respective management projections were prepared that would lead them to believe that the management projections, taken as a whole, are unreasonable, misleading or inaccurate in any material respect;
Assumed that information, data, opinions and other materials relating to BFC, BBX Capital, and the proposed Merger (the Information) provided to Hovde and representations made by the management of BFC and BBX Capital, either orally or in writing, are substantially accurate, did not and do not contain any untrue statement of material fact in respect of BFC, BBX Capital, their affiliates or the proposed Merger, and did not and do no omit to state a material fact in respect of BFC, BBX Capital, their affiliates, and the proposed Merger necessary to make the Information not misleading in light of the circumstances under which the Information was provided. Items are considered material, regardless of size, if they involve an omission or misstatement of financial, accounting or other information that would reasonably be expected to change or influence the conclusions of a reasonable person relying thereon;
33
|
ASSUMPTIONS, QUALIFICATIONS, AND LIMITING CONDITIONS (CONTD)
Assumed that (i) the representations and warranties made by all parties in the Agreement are true and correct and that each party to the Agreement will fully and timely perform all covenants, undertakings and obligations required to be performed by such party, and (ii) the final versions of all documents reviewed by Hovde in draft form, including the Agreement, conform in all material respects to the drafts reviewed;
Assumed that there has been no material change in the assets, liabilities, financial condition, results of operations, business, or prospects of BFC, BBX Capital, or their affiliates, since the date of the most recent financial statements and other information made available to Hovde;
Assumed that all of the conditions required to implement the proposed Merger will be satisfied and that the proposed Merger will be completed in a timely manner in accordance with the Agreement without any amendments thereto or any waivers of any terms or conditions thereof, and in a manner that complies in all respects with all applicable laws;
Assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the proposed Merger will be obtained without any undue delay, limitation, restriction or condition that would have a material effect on BFC, BBX Capital, or the contemplated benefits expected to be derived in the proposed Merger; and
Assumed any adjustments to the Merger Consideration pursuant to the Agreement will not be material to our analysis or the Opinion.
To the extent that any of the foregoing assumptions or any of the facts on which the Opinion is based prove to be untrue in any material respect, the Opinion cannot and should not be relied upon for any purpose. Furthermore, in Hovdes analysis and in connection with the preparation of the Opinion, Hovde has made numerous assumptions with respect to industry performance, general business, market and economic conditions and other matters, many of which are beyond the control of any party involved in the proposed Merger and as to which Hovde does not express any view or opinion in the Opinion, including as to the reasonableness of such assumptions.
34
|
ASSUMPTIONS, QUALIFICATIONS, AND LIMITING CONDITIONS
Qualifications if issued, our Opinion will be qualified by the following:
Hovde has prepared the Opinion effective as of the date thereof. The Opinion is necessarily based upon the information made available to Hovde as of the date thereof and market, economic, financial and other conditions as they exist and can be evaluated as of the date thereof, and Hovde disclaims any undertaking or obligation to (i) advise any person of any change in any fact or matter affecting the Opinion which may come or be brought to the attention of Hovde after the date thereof, or (ii) update, revise or reaffirm the Opinion after the date thereof. Hovde did not evaluate the BBX Capitals or BFCs solvency or conduct an independent appraisal or physical inspection of any specific assets or liabilities (contingent or otherwise) of BBX Capital or BFC or their affiliates.
Hovde has not been requested to, and did not, (i) initiate any discussions with, or solicit any indications of interest from, third parties with respect to the proposed Merger, the assets, businesses or operations of BBX Capital, or any alternatives to the proposed Merger, (ii) negotiate the terms of the proposed Merger, or (iii) advise the Special Committee or any other party with respect to alternatives to the proposed Merger.
Hovde did not undertake an independent analysis of any potential or actual litigation, regulatory action, possible unasserted claims or other contingent liabilities, to which BBX Capital or BFC or their affiliates is or may be subject, or of any governmental investigation of any possible unasserted claims or other contingent liabilities to which BBX Capital or BFC or their affiliates is or may be a party or is or may be subject. Hovde is not expressing any opinion as to the market price or value of the shares of BBX Capital or BFC (or anything else) after the announcement or the consummation of the proposed Merger (or any other time). The Opinion should not be construed as a valuation opinion, a credit rating, a solvency opinion, an analysis of the Companys creditworthiness, or legal, tax, or accounting advice. Hovde has not made, and assumes no responsibility to make, any representation, or render any opinion, as to any legal matter.
In rendering the Opinion, Hovde is not expressing any opinion with respect to the amount or nature or any other aspect of any compensation payable to or to be received by any of BBX Capitals officers, directors, or employees, or any class of such persons, relative to the Merger Consideration, or with respect to the fairness of any such compensation.
35
|
ASSUMPTIONS, QUALIFICATIONS, AND LIMITING CONDITIONS
Limiting Conditions If issued, the use of our Opinion will be strictly limited and will state:
The Opinion is furnished solely for the use and benefit of the Special Committee in connection with its consideration of the proposed Merger and is not intended to, and does not, confer any rights or remedies upon any other person, and is not intended to be used, and may not be used, by any other person or for any other purpose, without Hovdes prior written consent.
The Opinion (i) does not address the merits of the underlying business decision to enter into the proposed Merger versus any alternative strategy or transaction; (ii) does not address any transaction related to the proposed Merger; (iii) is not a recommendation as to how the Special Committee, the Board of Directors, BBX Capital (or BFC) or any other person including security holders of BBX Capital or BFC as to how such person should vote or act with respect to any matters relating to the proposed Merger, or whether to proceed with the proposed Merger or any related transaction, and (iv) does not indicate that the Merger Consideration is the best possible attainable under any circumstances; instead, it merely states whether the Merger Consideration is within a range suggested by certain financial analyses. The decision as to whether to proceed with the proposed Merger or any related transaction may depend on an assessment of factors unrelated to the financial analysis on which the Opinion is based.
The Opinion should not be construed as creating a fiduciary duty on the part of Hovde to any party.
The Opinion is solely that of Hovde, and Hovdes liability in connection with the Opinion shall be limited in accordance with the terms set forth in the engagement letter among Hovde, BBX Capital, and the Special Committee dated June 12, 2016 (the Engagement Letter). The Opinion is confidential, and its use and disclosure is strictly limited in accordance with the terms set forth in the Engagement Letter.
36
Exhibit (c)(3)
|
July 26th, 2016
Presentation Prepared for the Board of Directors:
|
General Information and Limitations
This presentation (this Presentation) has been prepared by Keefe, Bruyette & Woods, Inc. (KBW) for the exclusive use of the Board of Directors (the Board) of BFC Financial Corporations (BFC or the Company) in connection with KBWs presentation to the Board at a meeting to be held on July 26, 2016.
This Presentation contains information obtained from publicly available sources and from materials provided to KBW by the Company and BBX Capital Corporation (BBX). In conducting our analyses, we have, with the consent of the Company, assumed and relied upon, without independent verification, the accuracy and completeness of all of the financial and other information reviewed by us, and we have not assumed any responsibility or liability for independent verification of, or the accuracy or completeness of, such information. KBW did not conduct any independent verification or any appraisal or physical inspection of properties, assets or liabilities or evaluate the solvency, financial capability or fair value of the Company or BBX under any state or federal laws, including those relating to bankruptcy, insolvency or other matters, and is not expressing a view or opining as to the terms of the proposed merger or any related transaction undertaken by the Company. We have further assumed that all financial and operating forecasts, estimates and projections, including those relating to Bluegreen Corp. (Bluegreen) and pro forma effects on BBX of the merger that were prepared and provided to us by BFC and BBX managements, and that were used by and relied upon by us, have been reasonably prepared by such managements on bases reflecting the best currently available estimates and judgments of such managements as to the future financial performance of BFC, BBX and Bluegreen or as to the pro forma effects of the merger, as the case may be. We have further assumed that such forecast estimates and projections, as well as third party real estate appraisals provided to us by BBX management, provide a reasonable basis upon which we could prepare the Presentation. We express no view as to any of the foregoing information or the assumptions or bases therefor.
This Presentation is based upon economic, market and other conditions as they exist and can be evaluated as of its date (or such other dates as reflected therein) and utilizes several analyses and techniques. KBW did not attribute any particular weight to any analysis or factor. KBW believes that its analyses must be considered as a whole and that selecting portions of such analyses and the factors considered by it, without considering all such analyses and factors, could create an incomplete view of the process underlying its conclusions. Any analysis of this type is subject to uncertainties and contingencies all of which are difficult to predict and are beyond the control of the firm preparing the analysis. It is understood that KBW does not have an obligation to replicate, revise or reaffirm this Presentation.
This Presentation and the information contained herein have been prepared solely for the Board and may not be used by any other person without the express prior written consent of KBW. Any party receiving these materials (other than the Board) is not authorized to rely on these materials for any purpose. The Company acknowledges that it shall not disclose to any person the existence of this Presentation, any view expressed by KBW in connection herewith (in writing or otherwise) or any portion hereof or thereof, or KBWs engagement, without KBWs express written consent. This Presentation, and the materials and financial models used by KBW in preparing this Presentation, have been developed by and are proprietary to KBW and are protected under applicable copyright laws. Not in limitation of any of the foregoing, any recipient thereof, by virtue of such receipt, agrees that it will not reproduce, distribute or make publicly available all or any portion of this Presentation or such models or other materials contained therein without the prior written consent of KBW.
2
|
KBW Disclosure
KBW has acted exclusively for the Board in rendering this Presentation and will receive a fee from BFC for its services, payable in full upon the rendering of this Presentation
This Presentation does not in any respect constitute a fairness opinion or other opinion or recommendation to any person or entity, including the Board, with respect to the proposed merger or any related transaction
KBW has relied upon the accuracy and completeness of all financial and other information provided to us or publicly available and KBW has not independently verified the accuracy or completeness of any such information or assumed any responsibility or liability for such verification, accuracy, or completeness
In addition to this engagement and an ongoing engagement of a KBW investment banking affiliate by an affiliate of BFC and BBX to serve as financial advisor in connection with a potential transaction, in the past two years, KBW has provided investment banking and financial advisory services to BFC and received compensation for such services. A commercial bank affiliate of KBW is also a lender to BFC under an existing revolving credit facility
In the past two years, KBW has not provided investment banking and financial advisory services to BBX
A senior member of the KBW bank team providing services to BFC in connection with this engagement owns shares of BFC common stock and BBX capital stock
KBW may in the future provide investment banking advice to BFC, BBX and their affiliates and receive compensation for such services
3
|
Table of Contents
Section Tab
Implied Exchange Ratio / Equity Value Analyses
Going Concern Value Based Approach1
Book Value Based Approach2
BFC and BBX Public Stock Price Based Approach3
Summary of Approaches4
4
|
Implied Exchange Ratio / Equity Value Analyses
|
Going Concern Value Based Approach
|
Going Concern Value Based Approach
General Approach
We utilized (i) estimated values for Bluegreen based on a selected companies analysis,
selected transactions analysis and discounted cash flow (DCF) analysis, and (ii)
estimated values for certain BBX real estate assets based on third party appraisals of
certain assets owned and held for sale and a DCF analysis of certain real estate
development projects. Expenses and operating results were not considered other than
for Bluegreen and the impact of taxes on sale were not considered for any entity.
At the direction of management, estimated values of all other assets, liabilities and
equity ownership stakes, including those held at the BFC and BBX holding company
levels, BBX Capital Asset Management, FAR, BBX Sweets, Woodbridge, and Renin, were
based on Q116 GAAP book values.
To derive implied equity value ranges for BFC and BBX, we adjusted BFCs and BBXs
Q116 GAAP book values to reflect estimated values for Bluegreen and certain real
estate assets as described above.
7
|
Going Concern Value Based Approach
Bluegreen
Methodology References / Assumptions Selected Metrics
Selected Companies Analysis 3 public companies that all engage in Vacation Ownership Enterprise Value / 2016E EBITDA
Interest (VOI) business activities Price / 2016E Earnings
Selected Transactions Analysis 3 mergers involving targets in the VOI industry Enterprise Value / EBITDA
Price / Earnings
Deals that were announced after 2010
Had an enterprise value OR common equity between
$200million and $10billion
Discounted Cash Flow Analysis Based on 2016 EBITDA and unlevered free cash flow numbers
provided by management
Growth rate of 9.0% from 2017 to 2021 per management
EV/ EBITDA exit multiple range: 7.0x8.0x
Discount rate range: 9.5%11.0%
8
|
Going Concern Value Based Approach
Bluegreen
Implied Bluegreen Equity Value Ranges ($ in millions)
$1,600
$1,395$1,417
$1,400
$1,295
$1,200 $1,171$1,167
$1,187
$1,000 $1,035$1,059
$980
$897
$800
$600
$400
EV /Price /EV /Price /DCF Analysis
16E EBITDA 16E EarningsEBITDAEarnings
Selected Companies AnalysisSelected Transactions Analysis
EV / 2016E EBITDA Price / 2016E NIEV / EBITDAPrice / NI
High: 8.5x High: 16.6xHigh: 8.4xHigh: 17.9x
Low: 7.6x Low: 13.5xLow: 7.2xLow: 11.5x
Note: Numbers above represent estimated equity values of Bluegreen only, and excludes assets and liabilities held at the Woodbridge level
9
|
Going Concern Value Based Approach
BBX Real Estate Assets
Assets
Methodology
Notes
Real Estate Owned and Held
Relied on 3rd party appraisals for each property
Includes 29 assets
for Sale
provided by management
The 29 assets have a combined GAAP book value of $65.1 million as of
3/31/16
Per most recent appraisals available for each property, the assets have an
aggregate appraised value of $94.7 million
Real Estate Development
Conducted DCF analysis
Includes 14 assets (12 of which are joint ventures)
Projects
Projected cash flows for each project were provided
The 14 assets have a combined GAAP book value of $50.8 million as of
by management
3/31/16
Discounted at 15% per management (internal
At a discount rate of 15%, the DCF analysis indicated an implied estimated
targeted IRR)
value of $96.8 million for the 14 assets
10
|
Going Concern Value Based Approach
Implied Exchange Ratio / Implied Equity Values of BFC and BBX
Based on (i) the implied Bluegreen equity value ranges (see page 9), (ii) the estimated values of the BBX real estate assets (see page 10), and (iii) managements direction to use book value for all other assets, liabilities and equity ownership stakes , we calculated implied equity values of BFC and BBX
The calculation reflects the following:
BFCs total direct and indirect ownership of ~91% of Bluegreen
BBXs direct ownership of 46% of Bluegreen
The implied values indicated by the going concern value based approach do not purport to be appraisals or reflect the prices at which companies or assets may actually be sold or the fair value of shares in connection with any appraisal rights proceeding. This does not consider expenses or operating results other than for Bluegreen and does not consider the impact of taxes on a sale.
Implied BFC Equity Value Low HighImplied BBX Equity ValueLowHigh
Implied Bluegreen Equity Value $ 897 $ 1,417Implied Bluegreen Equity Value$ 897$ 1,417
BFC Book Value per Share $ 4.56 $ 4.56BBX Book Value per Share$ 20.50$ 20.50
x Shares Outstanding 84.6 84.6x Shares Outstanding16.416.4
BFC Total Common Equity $ 385 $ 385BBX Total Common Equity$ 336$ 336
Bluegreen Adjustment Bluegreen Adjustment
Less: 91% Q116 Carrying Value $ (229) $ (229)Less: 46% Q116 Carrying Value$ (115)$ (115)
Plus: 91% Estimated Value 820 1,295Plus: 46% Estimated Value413652
Net Bluegreen Adjustment $ 591 $ 1,066Net Bluegreen Adjustments$ 297$ 537
Real Estate Owned/Held for Sale Adjustment Real Estate Owned/Held for Sale Adjustment
Less: 81% Q116 Book Value $ (53) $ (53)Less: 100% Q116 Book Value$ (65)$ (65)
Plus: 81% Appraised Value 7777Plus: 100% Appraised Value9595
Net REO Adjustment $24$ 24Net REO Adjustment$30$ 30
Real Estate Development Projects Adjustment Real Estate Development Projects Adjustment
Less: 81% Q116 Book Value $ (41) $ (41)Less: 100% Q116 Book Value$ (51)$ (51)
Plus: 81% Estimated Value 7979Plus: 100% Estimated Value9797
Net RE Development Projects Adjustment $37$ 37Net RE Development Projects Adjustment$46$ 46
Implied BFC Estimated Equity Value $ 1,038 $ 1,513Implied BBX Estimated Equity Value$ 709$ 948
Implied BFC Estimated Equity Value per Share $ 12.27 $ 17.89
Implied BBX Estimated Equity Value per Share$ 43.26$ 57.85
Implied Exchange Ratio (BBX / BFC)3.53x3.23x
11
|
Going Concern Based Approach
Implied Exchange Ratios
Implied Exchange Ratio Ranges (BBX Equity Value per Share divided by BFC Equity Value per Share)
3.75x
3.53x
3.50x 3.46x
3.42x 3.41x
3.34x
3.34x 3.35x
3.25x 3.28x
3.24x3.23x
3.00x
EV / Price /EV /Price /DCF Analysis
16E EBITDA 16E EarningsEBITDAEarnings
Selected Companies Analysis Selected Transactions Analysis
Selected Companies AnalysisSelected Transaction Analysis
EV / 16E EBITDAPrice / 16E EarningsEV / EBITDAPrice / EarningsDCF Analysis
Implied BFC Estimated Value per Share
Low $13.76$14.02$13.17$12.27$15.41
High 15.2416.5715.1917.6517.89
Implied BBX Estimated Value per Share
Low $47.14$47.80$45.60$43.26$51.41
High 50.9654.4350.8457.2457.85
12
|
Going Concern Value Based Approach: Supporting Detail
|
Supporting Detail
Bluegreen Selected Companies Analysis
2016E(1)2017E(1)
PriceMarketTEV /Price /TEV /Price /
Vacation Ownership Ticker 7/22/16Cap.TEVEBITDA (x)Earnings (x)EBITDA (x)Earnings (x)
Wyndham Worldwide WYN $ 77.22$ 8,645$11,6368.5x13.5x8.1x12.3x
Interval Leisure Group IILG 17.652,2702,742 (2)8.1x (3)16.2x7.3x (3)14.6x
Marriott Vacations VAC 76.422,0622,0137.6x16.6x7.1x14.6x
Low7.6x13.5x7.1x12.3x
Median8.1x16.2x7.3x14.6x
High8.5x16.6x8.1x14.6x
Bluegreen Implied Values ($in millions)
Bluegreen #$151.4$78.1
Implied Enterprise Value
Low$1,144$1,167
Median1,2311,374
High1,2801,404
Implied Equity Value
Low$1,035$1,059
Median1,1231,265
High1,1711,295
Note: Enterprise value excludes all receivables-backed debt Source: CapIQ, SNL, Public Filings (1) Based on consensus estimates, unless noted
(2) Net debt pro forma for Vistana acquisition per Q116 IILG investor presentation (transaction closed in May 2016) (3) Based on IILG management projections per IILG S-4 filed on 12/16/15
14
|
Supporting Detail
Bluegreen Selected Transactions Analysis
Ann. At AnnouncementTEV /Price /
(1)(2)
Date Target AcquirerTEVEquity ValueEBITDAEarnings
Jun-16 Diamond Resorts International Apollo Global Management$2,573$2,2307.2x(3)11.5x(4)
Oct-15 Vistana Signature Experiences Interval Leisure Group1,500(5)1,500 (5)8.4x(6)13.0x(6)
Feb-11 Silverleaf Resorts Cerberus Capital Management159957.3x(7)17.9x(7)
Low7.2x11.5x
Median7.3x13.0x
High8.4x17.9x
Bluegreen Implied Values ($in millions)
Bluegreen #$151.4$ 78.1
Implied Enterprise Value
Low$1,089$ 1,006
Median1,1041,128
High1,2761,504
Implied Equity Value
Low$980$ 897
Median9951,019
High1,1671,395
Source: CapIQ, SNL, Public Filings
(1) Enterprise Value excludes all receivables-backed debt
(2) EBITDA numbers are net of all interest expense on receivables-backed debt
(3) Based on Wall Street 2016E estimates; Research estimates adjusted to be net of vacation interest cost of sales (4) Based on 2016E consensus estimates (5) Based on announced deal value per 10/28/15 press release
(6) Multiples based on 2015A financials per IILG Form S-4 amendment filed on 3/9/16; Vistana EBITDA represents disclosed adjusted EBITDA net of non-cash compensation expenses and percentage of completion deferral adjustment (7) Multiples based on LTM 3/31/11A financials per public filings
15
|
Supporting Detail
Bluegreen Discounted Cash Flow Analysis
Assumptions
Growth Rate(1) 9.0%
Exit Multiple (EV / EBITDA) 7.5x
Discount Rate 10.25%
For the Period Ended December 31,
($ in millions) 201620172018201920202021
Financial Metrics
Adjusted EBITDA(2) $151.4$165.0$179.9$196.0$213.7$232.9
Growth 9.0%9.0%9.0%9.0%9.0%
Free Cash Flow(3) $71.9$78.3$85.4$93.1$101.4$110.6
Growth 9.0%9.0%9.0%9.0%9.0%
9 mo.s
EndedFull Year Ended December 31st,
Discount Cash Flow Analysis 3/31/2016 20162017201820192020
Unlevered Free Cash Flow $53.9$78.3$85.4$93.1$101.4
Exit Valuation ----1,746.8
Total Free Cash Flow 0 $53.9$78.3$85.4$93.1$1,848.3
Total Present Value @ Midpoint $1,407.9
Less: Net Corporate Debt (60.0)
Less: Non-Controlling Interest (48.7)
Implied Equity Value @ Midpoint $1,299.1
Implied Bluegreen Equity Values
Exit MultipleEV / EBITDA
$1,299.17.0x7.5x8.0x
unt9.5%$1,265.8$1,341.4$1,417.1
sco Rate10.25%1,225.91,299.11,372.3
Di11.00%1,187.51,258.41,329.3
Per management
2016E Adjusted EBITDA provided by management
2016E Free Cash Flow provided by management; see next page for calculation
16
|
Supporting Detail
Bluegreen Adjusted EBITDA to Unlevered Free Cash Flow Reconciliation
Free Cash Flow Calculation ($ in mm)
2016
2016E Adjusted EBITDA(1) $ 151.4
Less: Depreciation & Amortization (10.2)
Pre-Tax Income $ 141.1
Less: Taxes at 39% (54.8)
Unlevered Net Income $ 86.3
Depreciation & Amortization 10.2
Less: Change in Operating Assets and Liabilities (68.0)
Less: Capital Expenditures (12.6)
Plus: Provision for Credit Losses 40.8
Plus: Net Proceeds from Note Receivables 15.2
2016E Unlevered Free Cash Flow $ 71.9
Source: Management
(1) 2016E Adjusted EBITDA is net of certain non-recurring expenses per management
17
|
Support Detail
Real Estate Owned and Real Estate Development Projects
Real Estate Owned Assets
The 29 assets have a combined GAAP book value of $65.1 million as of 3/31/16
Per most recent appraisals available for each property, the assets have an aggregate appraised value of $94.7 million
Real Estate Development Assets
Represents 14 assets with a 3/31/16 GAAP book value of $50.8 million
Cash flow projections provided by management
Discounted at 15% per management (internal targeted IRR)
($ in millions) For the 3 Mo.s Ended
3/31/166/30/169/30/16 12/31/16 3/31/176/30/179/30/17 12/31/17 3/31/186/30/189/30/18 12/31/18 3/31/196/30/199/30/19 12/31/193/31/206/30/209/30/2012/31/20
Projected Cash Flows $-$ 0.4$ 13.4 $ 11.6 $ 1.3$ 13.8$ (2.8) $ 3.1 $ 9.7$ 3.7$ 3.7 $ 7.6 $ 3.2$ 41.2$ 2.9 $ 13.1$ 1.9$ 1.8$ 2.4$ 3.3
Discount Rate 15.0%
Net Present Value $96.8
18
|
Supporting Detail
Bluegreen Cost of Capital Calculation
5 Year
Selected Companies Beta(1) LowHigh
Wyndham Worldwide 1.2Risk Free Rate (2)1.90%1.90%
Interval Leisure Group 1.0Market Risk Premium(3)6.90%6.90%
Marriott Vacations 1.1Beta1.01.2
Size Premium(3)1.62%1.62%
Low 1.0CAPM Cost of Equity10.5%11.8%
High 1.2WACC(4)9.6%10.7%
Market Capitalization ($mm)Size
DecileSmallestLargestPremium
122,035629,010(0.36%)
29,61821,8090.57%
35,2069,6110.86%
43,1965,2000.99%
52,0913,1871.49%
Bluegreen falls in this range 61,4012,0841.63%
based on selected companies 78461,4001.62%
analysis and selected 84498442.04%
transactions analysis 92104482.54%
1022095.60%
Source: SNL Financial, FactSet Research Systems, CapIQ, Bloomberg and the latest Duff & Phelps Valuation Handbook Guide to Cost of Capital as of 12/31/2015
(1)
5 year betas per Bloomberg
(2)
20-year treasury rate as of 7/22/2016
(3)
Latest long-horizon expected market risk premium and size premium methodologies per Appendix 3 of Duff & Phelps 2015 Valuation Handbook Guide to Cost of Capital (utilizing the same data
sources and methodology previously published in the Ibbotson Valuation Yearbook)
(4)
Calculation excludes VOI-backed debt; assumes market value of equity based on median implied value of equity per Price to 2016E earnings multiple of selected companies; assumes cost of debt of
6.0% based on selected public debt and Bluegreen existing capital structure; assumes tax rate of 39% per management
19
|
Book Value Based Approach
|
Book Value Based Approach
Implied Exchange Ratios
Implied Exchange Ratios Based on Book Values (BBX / BFC)
5.00x
4.81x
4.75x 4.66x
4.58x
4.50x
4.50x
4.25x
4.00x
3.75x
3.50x
3.25x
3.00x
2015 Q2 2015 Q32015 Q42016 Q1
Reported Book Value per Share
Q215Q315Q415Q116
BFC$4.08$4.18$4.46$4.56
BBX19.6319.4920.4220.50
Source: SNL and CapIQ
21
|
BFC and BBX Public Stock Price Based Approach
|
BFC and BBX Public Stock Price Based Approach
Implied Exchange Ratios
Implied Exchange Ratios Based on Selected Market Prices (BBX / BFC)
6.00x
5.64x
5.53x5.50x5.57x
5.50x 5.44x5.40x
5.19x
5.00x
4.50x
4.00x
3.50x
3.00x
Current Price (as of 5 Days20 Days30 Days60 Days90 Days180 Days
7/22/16)
VWAP
VWAPVolume Traded$ Volume Traded
BFCFBBXBFCFBBXBFCFBBX
5 Day$ 2.82 $15.5757,16413,060$ 160,954 $203,328
20 Day2.7414.88727,507116,6951,990,5621,736,530
30 Day2.6814.741,048,973229,0412,809,9593,376,091
60 Day2.6614.793,138,157375,7088,335,7215,555,177
90 Day2.7814.995,264,047584,40714,612,4738,758,676
180 Day2.8814.958,461,9721,789,74124,394,42626,758,301
Source: FactSet
23
|
Summary of Approaches
|
Summary of Approaches
Implied Exchange Ratios by Approach
Implied Exchange Ratio Ranges by Approach
6.00x
5.75x 5.64x
5.50x
5.25x
5.19x
5.00x
4.81x
4.75x
4.50x
4.50x
4.25x
4.00x
3.75x
3.53x
3.50x
3.25x
3.23x
3.00x
Going Concern Value Book ValueBFC and BBX Public Stock Price
25
Z79.-U=OW^V'[0;QZTRHZIT1[F91
M^5VG]/3.6,Z_%;CZ^IX3)%XT_B4X^>V77OK(Q$#SO?M9J#\IN?-L]VE/>"S]
M(AX2.QA'?L]A^IM?T!!HBA\S#Y*^(Z7*P70
M :R^LAK/8>X^FCRKUIJBE6/8FP
MK74ZFSK5,J4:M+V*==-=FTB3=(1D:WQE9TJWCF2RY\%\N$DC&_L&8:!O+7+]
M7V5Y>U(4K6%23E.3PBL:=[]K-0?E-SYMGNTI[P6?I
M$/"1V,([]GL/U-K^@(-$4/F8?)7Q'2Y6"Z
M
M
M "P]J?RPV/\ P';_ %>D1#:B]W[[T.MY
MN15'NEV3C=7;]_MA^T&\>M,J.J=$>YF4?E=I_3TSEC.OQ6X^OJ>$R1>-/XE.
M/GMEU[ZR,1 \[W[6:@_*;GS;/=I3W@L_2(>$CL81W[/8?J;7] 0:(H?,P^2O
MB.ERL%T
M
M
M %A[4_EAL?^ [?ZO2(AM1>[]]Z'6\W(JCW2[)QNKM^_VP_:#>/6F5'5.B/<
MS*/RNT_IZ9RQG7XK7U/"9(O&G\2G'SVRZ]]9&(@>=[]K-0?E-SYMGNTI[P
M6?I$/"1V,([]GL/U-K^@(-$4/F8?)7Q'2Y6"Z
M
M
M "P]J?RPV/_ =O]7I$0VHO=^^]#K>
M;D51[I=DXW5V_?[8?M!O'K3*CJG1'N9E'Y7:?T],Y8SK\5N/KZGA,D7C3^)3
MCY[9=>^LC$0/.]^UFH/RFY\VSW:4]X+/TB'A([&$=^SV'ZFU_0$&B*'S,/DK
MXCI=[]K-0?E-SYMGNTI
M[P6?I$/"1V,([]GL/U-K^@(-$4/F8?)7Q'2Y6"Z
M
M
M "P]J?RPV/_ ';_5Z1$-J+W?OO
M0ZWFY%4>Z79.-U=OW^V'[0;QZTRHZIT1[F91^5VG]/3.6,Z_%;CZ^IX3)%XT
M_B4X^>V77OK(Q$#SO?M9J#\IN?-L]VE/>"S](AX2.QA'?L]A^IM?T!!HBA\S
M#Y*^(Z7*P70
M
M
M 6'M3^6&Q_X#M_J](B&U%[OWWH=;S=[]K-0?E-SYMG
MNTI[P6?I$/"1V,([]GL/U-K^@(-$4/F8?)7Q'2Y6"Z
M
M
M "P]J?RPV/\ P';_ %>D1#:B
M]W[[T.MYN15'NEV3C=7;]_MA^T&\>M,J.J=$>YF4?E=I_3TSEC.OQ6X^OJ>$
MR1>-/XE./GMEU[ZR,1 \[W[6:@_*;GS;/=I3W@L_2(>$CL81W[/8?J;7] 0:
M(H?,P^2OB.ERL%T
M
M
M %A[4_EAL?^ [?ZO2(AM1>[]]Z'6\W(JCW2[)QNKM^_VP_:#>/6
MF5'5.B/=[]K-0?E-S
MYMGNTI[P6?I$/"1V,([]GL/U-K^@(-$4/F8?)7Q'2Y6"Z
M
M
M "P]J?RPV/_ =O]7I$0VH
MO=^^]#K>;D51[I=DXW5V_?[8?M!O'K3*CJG1'N9E'Y7:?T],Y8SK\5N/KZGA
M,D7C3^)3CY[9=>^LC$0/.]^UFH/RFY\VSW:4]X+/TB'A([&$=^SV'ZFU_0$&
MB*'S,/DKXCI-HZCJ%=K
M+D;]I\D-\K)\X+O"^T_S=Z?R;+K[.Z-]*M>VT9_[4\5Q<%.4\4W'!8SV)8_R
M-(V.H.<'/\XS&RR6M91HV5Q*'^Y#!\/'.,,&HRQ>$-K>'\S-_I@]1OEKM#EI
MR$Z>W/BBZ]@N1FCZR6\QUQU>DNRKEDKZ;FKD>,WC TA)LUSNHR\14E&OFV6A
M5V:ZB:[9%=+Y>.:QTGD=GD=KJK3%6K+*;F? X5-LHR[;!IX+.">W PGZHNY^.^C>%NU;/RNU-=]TZ L)86@;#I-#B(Z6EU65RDT8
MR*DUS25DJB<,U86#+3PI%)ZDY9/CMU4