A Las Vegas-based private resort firm announced Monday its plan to buy Sunterra Corporation, a publicly owned vacation ownership company that owns Lake Tahoe Vacation Resort in South Lake Tahoe.

Sunterra's deal with its rival Diamond Resorts amounts to $700 million in cash and liabilities, the latter part making up over half the transaction. At $16 a share, it's expected to close by the end of the next quarter.

With two decades under its belt, Diamond Resorts International LLC operates a group of affiliated companies that develops, operates and markets vacation ownership resorts in the western United States. Formerly known as International Resort Group, Diamond Resorts' closest property is the Polo Towers located off the Las Vegas strip.

In turn, Sunterra manages 100 timeshare resorts in 13 countries, primarily in North America, Hawaii, the Caribbean and Europe.

Diamond Resorts' intention to purchase Sunterra gives the company an opportunity to move into the Lake Tahoe market, expand its timeshare offering and move the publicly traded Sunterra into a private standing. The business practice is common among companies trying to avoid the multitude of regulations, including Sarbanes-Oxley legislative restrictions that came about as a result of WorldCom and Enron financing scandals.

"The benefit is we won't have to deal with Sarbanes-Oxley, and this will allow us to expand," Chief Executive Officer Stephen Cloobeck told the Tahoe Daily Tribune in a conference call Monday.

Cloobeck said no changes in staffing are expected.

"We anticipate no demonstrative changes in our Northern California assets except there will be more of a customer service enhancement," he said. He gave as an example the standardized upscale bedding Marriott has formalized. Marriott, which runs two time-share hotel properties near Stateline, is one of its primary competitors.

"This is all to deliver a consumer experience," he said.

South Lake Tahoe Mayor Kathay Lovell said she was surprised by the news, but was comforted in knowing the experienced firm would be taken over, given Lake Tahoe Vacation Resort's expansion plans in the heart of South Lake Tahoe's redevelopment zone.

In evaluating whether to proceed with the formerly named Embassy Vacation Resort plans on lots on both sides of Ski Run Boulevard and Highway 50, Cloobeck said he's unfazed by the growing list of competitive units going in or offered in recent years on the South Shore. In particular, the latest to be built at the 12-acre site where a $410 million convention center complex come May left Cloobeck slightly unimpressed based on his opinion of hotel condominium projects.

"I don't think they work," he said sharply.

Inherent risks to investments aside, the two companies are seeking a smooth transfer of ownership despite Sunterra's history of bankruptcy, U.S. Securities and Exchange Commission inquiry, Nasdaq stock market delisting and the firing of its chief accountant, Grant Thornton. A new accountant has been hired.

"We're still subject to the SEC's inquiry and the shareholders' lawsuits. We just don't know how it will play out. We're working through that," Sunterra's interim Chief Executive Officer Jim Weissenborn said.