Las Vegas, NV, March 12, 2007 � Diamond Resorts, LLC today
announced that it has entered into a definitive agreement under which an
affiliate of Diamond Resorts will acquire Sunterra Corporation (Other OTC:
SNRR.PK) for $16.00 per share in cash, a 35% 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 Diamond Resorts affiliate is expected to commence a tender offer
(the �Offer�) for all of Sunterra�s outstanding common stock within the
next five business days, which is subject to extension in certain circumstances
and will remain open for 40 calendar days following commencement of the
Offer. A bank group led by Credit Suisse has provided a debt financing
commitment to Diamond Resorts to support the Offer.
Stephen J. Cloobeck, Chairman and Chief Executive Officer of Diamond
Resorts, said, �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. 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 capitalize on Sunterra�s
assets and enhance its position as a global leader in vacation ownership
innovation and quality.�
Mr. 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.�
The Sunterra Board of Directors has unanimously approved the acquisition
and recommends that shareholders accept the Offer. Consummation of
the Offer is subject to customary conditions and is not subject to financing.
Diamond Resorts� acquisition of Sunterra is expected to be completed during
the second quarter of 2007. Following the acquisition of at least
90% of Sunterra�s outstanding shares in the Offer, the Diamond Resorts
affiliate will merge with and into Sunterra, with any shares not tendered
in the Offer being converted into the right to receive $16.00 per share
in cash. Sunterra will remain headquartered in Las Vegas, Nevada.
.
John D. Ziegelman, Chairman of Sunterra, said, �Both our management
team and our Board of Directors believe that, following a detailed review
of strategic alternatives, the Diamond Resorts Offer is the best approach
to maximize shareholder value and is in the best interests of Sunterra�s
stockholders, customers and employees. We look forward to working
with Diamond Resorts to effect a smooth transition.�
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.
Following the Diamond Resorts affiliate�s acquisition of at least 90% of
Sunterra�s outstanding shares, the Diamond Resorts affiliate will merge
with and into Sunterra, with any shares not tendered in the tender offer
being converted into the right to receive $16.00 per share in cash.
Sunterra will remain headquartered in Las Vegas. |
.
UBS Securities LLC, Credit Suisse, Trivergance LLC, Piercy Bowler Taylor
and Kern, Certified Public Accountants, and Textron Financial Corporation
are acting as financial advisors to Diamond Resorts and Christensen, Glaser,
Fink, Jacobs, Weil & Shapiro, LLP, Ballard Spahr Andrews & Ingersoll,
LLP and Katten Muchin Rosenman LLP are acting as legal counsel to Diamond
Resorts.
The Offer for the outstanding shares of Sunterra has not yet commenced.
This announcement is not a recommendation, an Offer to purchase or a solicitation
of an Offer to sell shares of Sunterra. When they become available,
shareholders should read:
� Sunterra�s solicitation/recommendation
statement on Schedule 14D-9
� Diamond Resorts� Tender
Offer statement on Schedule TO, including the Offer to Purchase, the Letter
of Transmittal and the other
Offer documents.
Each of these documents will contain important information about the
Offer. When they become available, shareholders can obtain these documents
from the U.S. Securities and Exchange Commission�s website at www.sec.gov.
Sunterra resorts include:
Austria:
The Alpine Club
Canada:
Clock Tower
Caribbean:
Flamingo Beach Resort
Royal Palm Beach Resort
France:
Le Club Mougins
Le Manoir des Deux Amants
Le Residence Normande
Royal Regency
Germany:
Alpen Club Schliersee
Italy:
Palazzo Catalani
Malta:
Sunterra Suites on Malta
Mexico:
Torres Mazatlan
Vallarta Torre
Norway:
Gala Fjellgrend
Portugal:
Vilar do Golf
Spain:
� Balearic Isles
Cala de Mar
Garden Lago
White Sands Country Club
White Sands Beach Club
� Costa del Sol
Los Amigos Beach Club
Royal Oasis Club at Benal Beach
Royal Oasis Club at La Quinta
Sahara Sunset Club
� Canary Isles
Club Cala Blanca
Club del Carmen
Jardines del Sol
Royal Sunset Beach Club
Royal Tenerife Country Club
Santa Barbara Golf & Ocean Club
Sunset Bay Club at Troviscas
Sunset Harbour Club
Sunset View Club
United Kingdom:
Great British Waterways Holidays
Broome Park Golf & Country Club
Carlton Court
Cromer Country Club
The Kenmore Club
Pine Lake Resort
Thurnham Hall
Woodford Bridge Country Club
Wychnor Park Country Club
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United States:
� Arizona
London Bridge Resort
Scottsdale Links Resort
Scottsdale Villa Mirage
Sedona Springs
Sedona Summit
The Ridge on Sedona Golf Resort
Villas at Poco Diablo
Villas of Sedona
� California
Lake Tahoe Vacation Resort
Oasis Resort
Marquis Villas Resort
San Luis Bay Inn
� Colorado
The Village at Steamboat Springs
� Florida
Coconut Palms Beach Resort
Coconut Mallory Resort & Marina
Cypress Pointe
Daytona Beach Regency
Ellington at Wachesaw Plantation
Grand Beach
Ocean Sands
Ocean Sands Beach Club
Polynesian Isles
Sea Villas
Westgate at South Beach (Coral Sands)
� Hawaii
Ka'anapali Beach Club
The Point at Poipu
Fairway Villa
Kapaa Shore
Papakea
Pono Kai
Royal Kuhio
Sea Mountain
Sea Village
Valley Isle
� Idaho
Elkhorn Resort
� Massachusetts
Beachside Village Resort
Edgewater Beach Resort
� Missouri
The Plantation at Fall Creek
� New Hampshire
Valley Inn Resort
� New Mexico
Villas de Santa Fe
� Nevada
Desert Paradise Resort
Kingsbury of Tahoe
Ridge Pointe
� Oregon
Embarcadero
The Pines
� South Carolina
Island Links Resort
Royal Dunes
� Tennessee
Bent Creek Golf Village
Gatlinburg Town Square
Town Village
Mountain Meadows
� Texas
Villas on the Lake at Lake Conroe
� Virginia
Greensprings Plantation
Powhatan Plantation
� Washington
Point Brown Resort |
For additional information about this acquisition, please visit www.diamondresorts.com.
About Diamond Resorts, LLC
Diamond Resorts has over 25 years of experience in the successful development,
management, marketing and sales of vacation ownership properties and has
been a consistent leader in the vacation ownership industry. Diamond
Resorts� premier properties include Polo Towers, the first purpose built,
high-rise vacation ownership property in the industry. Diamond Resorts
most recently spearheaded the design of Marriott�s Grand Chateau vacation
ownership resort. The Diamond Resorts properties include some of
the first vacation ownership properties in Las Vegas, such as the Jockey
Club and The Carriage House, as well as Kona Reef in Hawaii. For
more information, please visit www.diamondresorts.com.
Forward-Looking Statements; Risks and Uncertainties
Statements contained in this document that disclose Sunterra�s
or its management�s intentions, expectations or predictions of the
future are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act. Sunterra cautions that these statements
involve risks and uncertainties and other factors that may cause results
to differ materially from those anticipated at the time such statements
are made. For example, such statements include the expected benefits and
costs of the transaction; management plans relating to the transaction;
the anticipated timing of filings and approvals relating to the acquisition;
the expected timing of the completion of the transaction; the ability to
complete the transaction considering the various closing conditions; any
statements of expectation or belief; and any statements of assumptions
underlying any of the foregoing. Additionally, future results, performance
and achievements may be affected by Sunterra�s ability to successfully
implement our strategic, operational and marketing, general economic conditions,
including a global economic downturn, the impact of war and terrorist activity,
business and financing conditions, foreign exchange fluctuations, governmental
and regulatory actions, the cyclicality of the vacation ownership industry,
relationships with key employees, domestic and international political
and geopolitical conditions, competition, downturns in leisure travel patterns,
risk associated with the level and structure of our indebtedness, risk
associated with potential acquisitions and dispositions and other circumstances
and uncertainties. In addition, potential risks and uncertainties include,
among other things: (1) the results of the Audit and Compliance Committee
investigation; (2) expectations as to the timing of the completion of such
investigation by the Committee and its independent counsel and any remedial
actions recommended by the Committee, Sunterra�s review, restatement and
filing of its previously issued financial statements and its assessment
of the effectiveness of disclosure controls and procedures and internal
control over financial reporting, the review and filing of Sunterra�s Forms
10-Q for the fiscal quarters ended March 31, 2006, June 30, 2006, and December
31, 2006, and its Form 10-K for the fiscal year ended September 30, 2006,
and the issuance of interim financial results forSunterra; (3) expectations
as to the timing of the completion of a re-audit by the new independent
registered public accounting firm; (4) the effects of the delisting of
Sunterra�s common stock from The Nasdaq National Market and removal of
Sunterra�s warrants from the OTC Bulletin Board and the quotation of Sunterra�s
common stock and warrants in the �Pink Sheets,� including any adverse effects
relating to the trading of the stock or warrants due to, among other things,
the absence of market makers; (5) the effects of any required restatement
adjustments to previously issued financial statements and material weaknesses
in internal control over financial reporting; (6) the effects of any filed
or future class action and derivative or other lawsuits or governmental
investigations alleging among other things, violations of federal securities
laws, by Sunterra or any of its directors or executive officers; (7) the
outcome of any legal or administrative proceedings, including the institution
of administrative, civil injunctive or criminal proceedings involving Sunterra
as well as Sunterra�s current or former employees, and the imposition of
fines and other penalties, remedies or sanctions arising out of such proceedings
(including any domestic or foreign investigations or inquiries); (8) potential
costs resulting from indemnity obligations of Sunterra to its officers
and directors names in any lawsuits or governmental investigations; (9)
the possibility that any default under Sunterra�s financing arrangements,
including our Senior Finance Facility, could cause acceleration of repayment
of the entire principal amounts and accrued interest on such arrangements;
(10) the effects of new accounting pronouncements; (11) the effects personnel
changes may have on Sunterra�s business; (12) the potential reclassification
by any taxing authority of Sunterra�s independent sales agents as employees,
rather than as independent contractors, and the potential decision of such
taxing authorities to hold Sunterra liable for back payroll taxes, which
could have a material adverse effect on Sunterra and (13) additional risks
and uncertainties and important factors described in Sunterra�s other press
releases and in the Sunterra�s filings with the Securities and Exchange
Commission, including our most recent annual report on Form 10-K and quarterly
report on Form 10-Q. Although Sunterra believes the expectations reflected
in such forward-looking statements are based upon reasonable assumptions,
we can give no assurance that our expectations will be attained or that
results will not materially differ. Sunterra undertakes no obligation to
publicly update or revise any forward-looking statement, whether as a result
of new information, future events or otherwise, except as may be required
by law. |