By Lisa Kerner
Charlotte, N.C., March 12 - Diamond Resorts, LLC entered into a definitive agreement for its affiliate to acquire Sunterra Corp. for $16 per share in cash in a transaction valued at $700 million, including $375 million of existing Sunterra debt.
The Diamond Resorts affiliate is expected to begin a 40-day tender offer for all of Sunterra's outstanding common stock within the next five business days, according to a company news release.
Sunterra's board of directors unanimously approved the acquisition and recommended that shareholders accept the offer.
Following the acquisition of at least 90% of Sunterra's outstanding shares, the Diamond Resorts affiliate will merge with and into the Las Vegas vacation ownership company. Any shares not tendered in the offer will be converted into the right to receive $16 per share in cash, according to the release.
"We are very excited about this acquisition, which 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," Diamond Resorts chairman and chief executive officer Stephen J. Cloobeck said in the release.
"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."
Las Vegas-based Diamond Resorts develops, manages and sells vacation ownership properties.
| Acquirer: | Diamond Resorts, LLC
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| Target: | Sunterra Corp.
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| Transaction value: | $700 million
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| Payment per share share: | $16.00
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| Announcement date: | March 9
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| Expected closing: | Upon approvals
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| Stock price for target: | Other OTC: SNRR.PK; $14.95 on March 9
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