Diamond Resorts back in isles

The time-share firm is buying rival Sunterra Corp. for $700M

Diamond Resorts LLC, a Las Vegas-based vacation ownership company, will soon reenter Hawaii's market through its acquisition of rival Sunterra Corp.

Diamond Resorts announced yesterday that it will acquire Sunterra for $700 million. The deal is expected to close in the second quarter.

Diamond Resorts once operated the Kona Reef Resort but sold the property two years ago and has had no assets in Hawaii since then, said Stephen Cloobeck, chairman and chief executive officer of Diamond Resorts.

"Diamond Resorts will be just as bullish on Hawaii as Sunterra has been," Cloobeck said.

The deal will pair two of the world's largest vacation ownership companies. Sunterra had owned 94 affiliated resort locations throughout the continental United States and Hawaii, Canada, Europe, the Caribbean and Mexico; while Diamond has been an industry leader for the past 25 years.

Once the deal closes, Diamond will operate 10 Hawaii properties: the Kaanapali Beach Club, the Point at Poipu, Fairway Villa, Kapaa Shore, Papakea, Pono Kai, Royal Kuhio, Sea Mountain, Sea Village and the Valley Isle.

No immediate personnel changes are expected to take place in Hawaii, Cloobeck said, but added that Diamond Resorts does plan substantial reinvestment and amenity upgrades such as improved bedding and guest hospitality kits.

Diamond will also assume Sunterra's ongoing negotiations to acquire several other Hawaii properties, he said. During the last several years, Sunterra has been particularly aggressive in pursuing expansion opportunities in the islands.

The Point at Poipu and the Kaanapali Beach Club were both acquired since 2004.

"We have a very significant investment in the islands and the company at present is looking at new opportunities to expand in Hawaii," sad Jim Weissenborn, who was serving as interim CEO of Sunterra prior to its acquisition by Diamond Resorts.