Sunterra Corporation has entered into a definitive agreement with an affiliate of privately held Diamond Resorts, LLC, based in Las Vegas. (3/20/2007)
According to an official release, an affiliate of Diamond Resorts will acquire Sunterra Corporation for $16.00 per share in cash, a 35 percent premium over the closing price of Sunterra’s common stock on March 8, 2007, the day before rumors of the acquisition entered the marketplace.
The total value of the transaction is approximately $700 million, including $375 million of existing Sunterra debt.
The Offer will be open for 40 calendar days following commencement of the Offer. The debt financing supporting the Offer will be financed by a bank group led by Credit Suisse, which has provided a definitive financing commitment to Diamond Resorts.
The Sunterra board of directors has unanimously approved the acquisition. Consummation of the Offer is subject to customary conditions and is not subject to financing. The parties expect Diamond Resorts’ acquisition of Sunterra to be completed during the second calendar quarter of 2007.
Stephen J. Cloobeck, chairman and chief executive officer, Diamond Resorts, said the acquisition will enable Diamond Resorts to build on “our position as a world leader in the vacation ownership industry to create the largest pure-play vacation ownership company in the world.”
“With over 25 years of experience and a successful track record in the development, management, marketing and sales of vacation ownership properties, we are uniquely positioned to capitalise on Sunterra’s assets and enhance its position as a global leader in vacation ownership innovation and quality,” he said.
Cloobeck added, “We plan to invest in Sunterra’s worldwide platform, including its 96 branded or affiliated vacation ownership resorts throughout the continental United States as well as in Hawaii , Canada , Europe, the Caribbean and Mexico. Our goal is to acquaint more consumers with the many benefits of vacation ownership and deliver an enhanced hospitality experience to Sunterra’s 326,000 current owner families in 13 countries across the globe. We look forward to working with Sunterra’s talented managers and employees to grow the Company in the years ahead.”