The Sunterra Corp., which operates a
portfolio of nearly 100 vacation ownership resorts around the
world, is being acquired for $700 million by Diamond Resorts, which
intends to take the company private.
Under the
definitive agreement signed with Sunterra, Diamond Resorts will
acquire the company for $16 a share, a 35% premium over the
Sunterra's closing stock price on March 8.
"We will be
filing our tender offer documents to acquire the outstanding shares
of the company in the next five days," Stephen Cloobeck, chairman
and CEO of Diamond Resorts told TravelWeekly.com.
The acquisition
is expected to be completed by the end of the second
quarter.
Diamond Resorts,
which specializes in developing, marketing and managing vacation
ownership properties, intends to retain Sunterra's staff and its
headquarter in Las Vegas.
Future plans
include developing a branded environment for Sunterra resorts,
including a "new bedding program, pillow program and amenity
program at the various resorts to give the customer an experience
beyond their expectation," Cloobeck said. "Hilton has done a nice
job [of branding its vacation ownership resorts]. So have Marriott,
Four Seasons, Hyatt and Disney. We believe the time has come for an
entrepreneurially based private company to do the same."
Diamond Resorts
also plans to renovate many Sunterra resorts, but declined to
provide further details such as how much it intends to invest in
the project and which properties will be involved. Other plans
include developing resorts in several new markets, for instance,
"Mexico, Central America and Asia," Cloobeck said.
To contact reporter Michael Milligan, send e-mail to [email protected].