In a significant development for Vacasa (NYSE: VCSA), the company's Special Committee of its Board of Directors has made a decisive move regarding an unsolicited acquisition proposal from Davidson Kempner Capital Management LP. After thorough deliberation, the committee has unanimously concluded that the proposal does not meet the criteria for what would be deemed a 'superior proposal' as outlined in the existing merger agreement between Vacasa and Casago.

The Special Committee's decision was not made lightly; it took into account a range of factors that led to this conclusion. Notably, the proposal from Davidson Kempner is contingent upon an amendment to Vacasas Tax Receivable Agreement. This amendment is essential for the proposal to move forward, yet Davidson Kempner has reportedly struggled to secure the necessary approvals from the beneficiaries of the Tax Receivable Agreement. Furthermore, the Special Committee expressed concerns about Davidson Kempner's refusal to comply with several material requests related to closing conditions and terms that would enhance transaction certainty.

Adding to the complexity of the situation is Davidson Kempners status as a creditor of Vacasa. This relationship creates a scenario of asymmetric downside risk for public stockholders in the event that a transaction with Davidson Kempner falters. Given these considerations, the Special Committee ultimately determined that the likelihood of the proposal being successfully completed, based on its current terms, is quite low. They cited that the proposals reliance on the amendment to the Tax Receivable Agreement and its significantly higher closing risks compared to the ongoing transaction with Casago led to this conclusion.

The Special Committee underscored its commitment to its fiduciary duties, emphasizing the importance of acting in the best interests of public stockholders. They strongly refuted several claims made by Davidson Kempner in their recent proposal communications. Despite Davidson Kempner offering a purchase price of $5.83 per share, the Board believes that the transaction lacks viability and certainty of closure compared to the agreement with Casago. This is especially pertinent given the current landscape of market volatility and uncertainty.

Previously, on March 17, Vacasa had entered into an amendment of the Merger Agreement with Casago. Under this revised agreement, Casago is set to acquire all outstanding shares held by public shareholders at a price of $5.30 per share. Importantly, Casago has also agreed to eliminate any purchase price adjustment provisions that could have potentially reduced the merger consideration based on shortfalls in Vacasas liquidity or the number of units managed below certain thresholds.

Both the Special Committee and the Board have reaffirmed their support for the amended Merger Agreement with Casago. They continue to recommend that Vacasa shareholders cast their votes in favor of this transaction, which they view as a more stable and reliable option compared to the competing proposal from Davidson Kempner.