June 18, 2012 at 12:53 PM EDT
Diamond Resorts Proposes All-Cash Acquisition of Bluegreen for $6.25 per Share

Diamond Resorts Corporation today announced that it has made a proposal to the Bluegreen Corporation (NYSE: BXG) Board of Directors offering to acquire all the outstanding shares of Bluegreen common stock for $6.25 per share, representing a total equity value of approximately $197 million. Diamond Resorts’ proposal is an all-cash offer and represents an 18 percent premium above the closing price of Bluegreen’s common stock on June 15, 2012. Importantly, Diamond Resorts’ offer represents a 17 percent premium over the all-stock offer proposed by BFC Financial (OTCBB: BFCF).

Diamond Resorts’ offer was initially submitted to the Bluegreen Board of Directors on June 15, 2012. On June 18, 2012, without discussion and without informing its shareholders of this superior offer, the Special Committee of the Board of Directors of Bluegreen Corporation notified Diamond Resorts that it was rejecting this proposal. With the Bluegreen shareholder vote to approve the BFC merger scheduled for Tuesday, June 19, 2012 and a superior offer for the company on the table, Diamond Resorts strongly urges the Bluegreen Board to delay the vote or failing that, for Bluegreen shareholders to reject the existing offer in order to fully consider the superior Diamond Resorts proposal.

“We are disappointed and quite frankly surprised that Bluegreen is not willing to delay its vote so that they can pursue our all-cash superior offer. Diamond Resorts has repeatedly tried to engage Bluegreen in an acquisition of the business and Bluegreen’s demonstrated lack of engagement is consistent with the Board’s continued efforts to enter into an undervalued insider deal and prevent its shareholders from considering our offer. Our offer is clearly superior to the existing offer and it is our belief that the Special Committee has both the ability and time to more fully consider our proposal while still maintaining its optionality with the BFC proposal,” stated Stephen J. Cloobeck, Chairman and Chief Executive Officer of Diamond Resorts.

The Diamond Resorts team, its financial partners and advisors are eager to move quickly toward consummation of this superior all-cash proposal, which is a substantial premium to the existing, conditional all-stock merger offer. Diamond Resorts is disclosing the contents of its correspondence with the Special Committee of the Board of Directors of Bluegreen Corporation in order to directly inform Bluegreen’s shareholders of Diamond Resorts’ superior all-cash offer.

Diamond Resorts, with global headquarters in Las Vegas, Nevada, is one of the largest hospitality companies in the world with more than 200 branded and affiliated resorts and over 27,000 guest beds in 28 countries with destinations throughout the continental United States and Hawaii, Canada, Mexico, the Caribbean, Europe, Asia, Australia and Africa. Offering simplicity, choice and comfort to more than 418,000 owners and members through the branded hospitality service of approximately 5,000 team members worldwide, Diamond Resorts is dedicated to providing its guests with effortless and relaxing vacation experiences every time, for a lifetime.

Following is the full text of the letter sent by Diamond Resorts Corporation to the Special Committee of the Board of Bluegreen Corporation on June 15, 2012.

June 15, 2012

Bluegreen Corporation
4960 Conference Way North
Suite 100
Boca Raton, Florida
Facsimile: (561) 912-8002

Re: Acquisition Proposal

Gentlemen:

On behalf of Diamond Resorts Corporation ("Diamond"), we are pleased to submit this proposal to acquire 100% of the outstanding equity of Bluegreen Corporation ("Bluegreen" or the "Company"), subject to the terms and conditions set forth in this letter.

We are aware that the Company is party to a merger agreement (the "BFC Merger Agreement") with BFC Financial Corporation ("BFC") which provides for the acquisition of the Company by BFC, and pursuant to which each Bluegreen share would be exchanged for the right to receive eight shares of BFC's Class A Common Stock. We are confident, however, that our proposal clearly represents a superior transaction for the Company's shareholders than does the BFC transaction. We are prepared to engage with the Board and your advisors immediately to discuss our proposal and move quickly toward its consummation.

Diamond, either directly or through an existing or newly formed subsidiary or affiliate, would be willing to acquire, via a merger, 100% of the outstanding shares of Bluegreen common stock for a purchase price of $6.25 per share in cash (the “Acquisition”). Note that this proposal is based solely on the public filings and other publicly available information regarding Bluegreen. Our proposal is contingent upon Diamond's ability to conduct appropriate due diligence, including meetings with Bluegreen's operating management, and our satisfaction with the results of such due diligence review. Diamond is prepared to enter into an appropriate non-disclosure agreement with the Company, and to commence its due diligence review immediately. Assuming that we are provided the requested information, access and cooperation promptly, we believe that we can complete our due diligence and negotiate a definitive merger agreement very quickly.

Diamond expects to fund the Acquisition with financing provided by one or more of our current institutional equity investors, which include Guggenheim Partners and others. These entities have previously funded the acquisition of Pacific Monarch Resorts (closed May 2012) and Tempus Resorts International (closed July 2011). Based on preliminary discussions, we are confident that financing for the Acquisition can be arranged on terms acceptable to Diamond. We anticipate that our merger agreement will not contain a financing contingency.

We believe that the proposed Acquisition presents a superior opportunity for Bluegreen's shareholders for a number of reasons, including without limitation the following:

  • Our proposed merger consideration of $6.25 per share represents a premium of (a) 19% over Bluegreen's closing stock price on June 14, 2012, (b) 17% over the implied per share consideration payable under the BFC Merger Agreement, based upon the exchange ratio in that agreement and the closing price of BFC's Class A Common Stock on the Pink Sheets on June 14, 2012, and (c) 206% over the closing price of Bluegreen's stock on November 11, 2011, the last trading day before the public announcement of the BFC Merger Agreement.
  • Our proposed merger consideration is 100% cash, eliminating for Bluegreen's shareholders all of the risks associated with holding shares of common stock in BFC that are set forth in the proxy statement for the BFC Merger Agreement.
  • Our proposed transaction provides certainty and speed of execution. As noted above, we expect to be in a position to execute a definitive merger agreement -- which would be approved by Diamond's board of directors and not be subject to a financing contingency – promptly following the commencement of our due diligence. We do not believe any material regulatory approvals would be required to consummate the Acquisition.

As you may know, Diamond Resorts, with global headquarters in Las Vegas, Nevada, is one of the largest hospitality companies in the world with more than 200 branded and affiliated resorts and over 27,000 guest beds in 28 countries with destinations throughout the continental United States and Hawaii, Canada, Mexico, the Caribbean, Europe, Asia, Australia and Africa. Offering simplicity, choice and comfort to more than 418,000 owners and members through the branded hospitality service of approximately 5,000 team members worldwide, Diamond Resorts is dedicated to providing its guests with effortless and relaxing vacation experiences every time, for a lifetime. We firmly believe that the combination of Bluegreen and Diamond's operations, resorts, and management teams will provide substantial benefits to our respective owners, business partners and employees.

We appreciate the importance of moving quickly, and as noted above, we and our advisors stand ready to proceed immediately toward a definitive merger agreement and a closing of the Acquisition. We would anticipate a response from the Board to our proposal promptly, but no later than 10:00AM EDT on June 18, 2012.

Sincerely,

DIAMOND RESORTS CORPORATION

Stephen J. Cloobeck David F. Palmer
Chairman and CEO President and CFO

Following is the full text of the letter sent by the Special Committee of the Board of Bluegreen Corporation to Diamond Resorts Corporation in response to our letter dated June 15, 2012.

June 18, 2012
Via Federal Express and email
Howard S. Lanznar
KattenMuchinRosenman LLP
525 W. Monroe Street
Chicago, Il 60661

Dear Mr. Lanznar:

On behalf of the Special Committee of the Board of Directors of Bluegreen Corporation (the “Company”), I acknowledge receipt of your letter addressed to the Directors of the Company dated June 15, 2012. The Special Committee has met and determined that your proposal to acquire 100% of the outstanding equity of the Company does not constitute, and could not reasonably be expected to result in, a Superior Proposal as defined in the merger agreement to which the Company is a party (the “Merger Agreement”). The Special Committee noted the unusual timing of your proposal so close to the Special Meeting of Shareholders of the Company to approve the Merger, the conditions attached to your proposal, the current lack of financing for your proposal and the extensive prior history with respect to the Company of both Diamond Resorts and Guggenheim Partners.

Very truly yours,
Stephen K. Roddenberry
Cc Special Committee

Following is the full text of the letter sent by Diamond Resorts Corporation to the Special Committee of the Board of Bluegreen Corporation on June 18, 2012.

June 18, 2012

Bluegreen Corporation
4960 Conference Way North
Suite 100
Boca Raton, Florida
Facsimile: (561) 912-8002

Re: Acquisition Proposal

Gentlemen:

As conveyed to you in our letter dated June 15, 2012, our Board of Directors has authorized a proposal to acquire all of the outstanding shares of common stock of Bluegreen Corporation at a price of $6.25 per share in cash. Despite our repeated efforts over the past two years to engage Bluegreen in negotiations, and without the benefit of discussing our proposal with us or our advisors, your Board of Directors has rejected our proposal. Due to your unwillingness to engage in discussions and the unique opportunity presented by our superior proposal for your shareholders to realize full and immediate value, we are compelled to make this proposal known to your shareholders. We urge you to delay the shareholder vote, scheduled for June 19, 2012, so that you and your shareholders have adequate time to more thoroughly consider our offer. Postponing the vote is permitted by the BFC Merger Agreement, would enable you to maintain your optionality with respect to the current BFC proposal, and would be in the best interest of your shareholders.

Sincerely,

DIAMOND RESORTS CORPORATION

Stephen J. Cloobeck David F. Palmer
Chairman and CEO President and CFO

Contacts:

Sloane & Company
Elliot Sloane, 212-446-1860
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