ROFR Explained?

[DrKnow]

Can someone explain (or point me to a good thread) the concept of Right of First Refusal? I gather that if someone wants to sell their shares in DVC, Disney has the right to refuse an accepted offer first (I think).

If that is the case, why would Disney want to accept someone else's offer first? (Do they then resale it on their end?)

 

[jerseyduke]

If you want to sell you DVC contract, for say 100 per point, DVC has the right to buy it first at that price. If they do not exercise that option, then the third party who wants to buy it, may buy it at that price.

It enables DVC to control the price more as well as put points back into their system to fill wait list requests

If Disney has a wait list of ppl that are willing to pay 130 per point at a specific property, and someone is trying to resell their contract at say 50 per point....Disney will exercise ROFR so they can get the points. At 75 or 80 they might let it go. You can sell your interest, but Disney gets the first crack at buying it.

It is common in many forms of contracts, for example, in professional sports. If a player declares Free Agency from team A, team A may have the right to match any offer another team makes that player

 

[disneynutz]

Disney wants to sell new resorts where they make the most money.

If they don't have enough new resorts to sell they will sell used contracts to keep the money flowing. They made the rules so they have first crack at any used contract.

They also IMO use ROFR to add additional delays to the resale process which makes buying resale undesirable for some people. This increases the number of people buying direct at a higher price.

It's a business advertised as a club.

Bill