Posted at 12:51 p.m., Monday, March 12, 2007
Diamond Resorts to buy Sunterra Corp. for $325M
Bloomberg News Service
NEW YORK — Diamond Resorts LLC, a closely held developer and manager of vacation properties, agreed to buy Sunterra Corp., including its 10 Hawai'i properties, for $325 million.Diamond Resorts will pay $16 a share and assume $375 million in debt, Sunterra said in a statement today. The tender offer will begin within five days and be open for 40 calendar days, according to the statement. Both Las Vegas-based companies said they expect to complete the acquisition during the second quarter of this year.
Sunterra has resort operations on Maui, O'ahu, the Big Island and Kaua'i.
Shares of Sunterra rose $3.10 to $14.95 on March 9 after the company acknowledged it was talking to Diamond Resorts. The offer is 35 percent higher than the March 8 closing price of Sunterra, a timeshare vacation company with more than 314,000 owner clients and nearly 100 affiliated vacation ownership resorts in the U.S., Canada, Europe, Mexico and the Caribbean.
Diamond Resorts secured debt financing for the bid from a group of banks led by Credit Suisse.
Sunterra shares rose 73 cents to $15.68 in over-the-counter trading of 4.18 million shares, 21 times the three-month daily average. The stock's gained 9 percent in the last 12 months.
