UPDATE 1-Cerberus to buy Silverleaf Resorts for $94 mln

Thu Feb 3, 2011 7:59pm EST

* Cerberus to pay $2.50/shr cash, 75 pct premium

* Silverleaf board approved transaction

* Cerberus to fund the deal with equity

NEW YORK, Feb 3 (Reuters) - Timeshare operator Silverleaf Resorts SVLF.O agreed to be bought on Thursday by hedge fund and private equity firm Cerberus Capital Management [CBS.UL] for $94.4 million in cash.

Cerberus will pay $2.50 per share for Silverleaf, a 75 percent premium to the company's closing price of $1.43 on Thursday.

Cerberus, which has $23 billion under management, has agreed to provide equity financing for the full amount of the deal.

Silverleaf is based in Dallas, Texas, and owns and operates timeshare resorts with amenities including golf, clubhouses, and indoor water parks.

Private equity firms are looking to buy assets as the office and hospitality real estate sectors recover, and as concerns about inflation increase the interest in real estate as an investment.

The transaction has been approved by Silverleaf's board of directors and a special shareholder meeting to approve the merger will be held as soon as possible.

Silverleaf was advised by Gleacher & Co. (Reporting by Clare Baldwin; Editing by Gary Hill)

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