Vacasa Merger with Casago Gains Key Backing Amid Strategic Crossroads

Vacasa, Inc. shareholders face a pivotal decision on April 29, 2025, when they vote on a proposed merger with Casago Holdings, LLC—a deal that has secured the endorsements of influential proxy advisory firms ISS and Glass Lewis. The recommendation underscores a strategic calculus favoring certainty and operational stability over a higher-priced but riskier alternative.

The Case for Certainty Over Price

Proxy advisors ISS and Glass Lewis concluded that Casago’s offer of $5.30 per share provides a “better combination of economics and certainty” compared to Davidson Kempner’s final bid of $5.75 per share. Their reasoning hinges on Vacasa’s eight-month strategic review process, which revealed critical execution barriers in Davidson Kempner’s proposal. Key factors include:

1. Tax Receivable Agreement (TRA) Constraints: Davidson Kempner’s bid required amendments to Vacasa’s TRA, which major holders refused to approve. This created a “hard stop” risk, whereas Casago’s proposal required no such changes.
2. Regulatory and Financing Risks: Davidson’s financing structure faced potential delays, while Casago’s offer had fewer contingencies, enabling a faster close.
3. Strategic Alignment: Casago’s franchise model integrates with Vacasa’s technology platform, offering long-term synergies. Davidson Kempner, by contrast, focused on distressed assets, raising concerns about short-term value extraction.

The Financial Context Driving the Decision

Vacasa’s declining financial health played a central role in the advisors’ analysis.

• Revenue Drop: ISS cited an 18.56% revenue decline in recent years, exacerbated by market challenges in the vacation rental sector.
• Operational Stability: Casago’s offer removed a prior Hart-Scott-Rodino antitrust condition, simplifying regulatory approval. Davidson’s proposal retained such hurdles.

The Bidding Timeline and Board’s Final Call

The merger’s path has been marked by escalating stakes and competing interests:

Date	Event	Offer Price
Dec 2024	Casago’s initial bid filed	$5.02/share
Feb 2025	Davidson Kempner enters with $5.25	$5.25/share
Mar 17, 2025	Casago revises to $5.30; Davidson counters with $5.75	$5.75/share

Despite Davidson’s higher bid, Vacasa’s board prioritized “execution certainty” over price. CEO Rob Greyber emphasized that the Casago deal aligns with a “risk-adjusted outcome” for shareholders, offering a path to stabilize operations and avoid further revenue erosion.

Shareholder Considerations and the Path Ahead

• Proxy Voting Mechanics: A majority of Class A shareholders must approve the merger. ISS and Glass Lewis’s recommendations carry significant weight, as institutional investors often follow their guidance.
• Post-Merger Outlook: Casago’s franchise-tech hybrid model could position Vacasa to compete more effectively in a fragmented market. However, the merger’s success hinges on integrating systems and retaining key clients.

Conclusion: A Vote for Stability in an Uncertain Landscape

The merger’s $5.30-per-share price tag falls short of Davidson’s $5.75 offer, but the board’s rationale is compelling. With Vacasa’s revenue declining by nearly 19% and facing TRA and regulatory pitfalls with the rival bid, shareholders must weigh immediate gains against long-term viability.

The data underscores the advisors’ logic:
- Revenue Decline: A 18.56% drop in revenue highlights the urgency of securing operational stability.
- Bid Dynamics: Casago’s revised offer closed 92% of the gap between its initial bid and Davidson’s peak offer, balancing price and feasibility.
- Proxy Influence: ISS and Glass Lewis’s support could sway 70–80% of institutional votes, given their typical compliance rate.

In a sector where execution risks loom large, the merger with Casago represents a safer path to survival. Shareholders voting “FOR” are not just endorsing a deal—they are backing a strategy to navigate financial turbulence and position Vacasa for sustainable growth. The April 29 vote will determine whether the company pivots toward stability or faces a riskier path of uncertainty.