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Fairmont rejects Icahn bid

Fairmont’s board of directors has concluded that Icahn Partners partial take-over bid for 41 percent of Fairmont’s outstanding shares at US$40 per share is inadequate. The board said it was not in the best interests of Fairmont or its shareholders.

Accordingly, the Board is recommending that shareholders reject the Icahn Offer and not tender any of their shares.

Peter C. Godsoe, Chairman of Fairmont’s Board of Directors, stated, “A Special Committee of independent directors carefully and thoroughly evaluated the Icahn Offer. Following the recommendation of the Special Committee, the Fairmont Board unanimously concluded that this offer is inadequate, not in the best interests of our shareholders and should be rejected.”

“We firmly believe that the Fairmont Board of Directors - rather than Mr. Icahn - is best qualified to make decisions about the future of Fairmont and what action will ultimately prove to be in the best interest of the Company and its shareholders. The Special Committee is actively exploring alternatives to the Icahn Offer, which may include a possible transaction with one or more third parties. We will provide further recommendations to the full Board in due course,” added Mr. Godsoe.

William R. Fatt, Fairmont’s Chief Executive Officer, commented, “Fairmont has a world-class collection of luxury assets, which represents some of the most attractive hotels in the global lodging industry. We also have significant undeveloped land holdings and a 23.7% ownership interest in Legacy Hotels Real Estate Investment Trust, Canada’s largest luxury lodging REIT. In addition, our growing brand recognition is attracting both travelers and business partners. Mr. Icahn’s partial take-over bid, for the reasons discussed in the Directors’ Circular, is not in the best interests of Fairmont and its shareholders, and should be rejected.”


In making its recommendation to reject the offer to its shareholders, the Fairmont Board of Directors received written opinions from each of UBS Securities LLC, Avington International and Scotia Capital Inc. that, as of the date of such opinions, the Icahn Offer is inadequate from a financial point of view to Fairmont shareholders (other than the offerors and their related parties). The Board cited a number of additional factors, including, among others:

    -  The Icahn Offer seeks to provide Icahn with control without
      offering, in the judgment of the Special Committee and the Board,
      an appropriate change of control premium for the shares purchased
      or any premium for the shares not purchased;

    -  There are risks associated with Icahn’s lack of experience in
      operating a company such as Fairmont;

    -  The Icahn Offer fails to comply with shareholder approved
      permitted bid requirements;

    -  The Icahn Offer is highly conditional; and

    -  There are other offers or alternatives to the Icahn Offer that may
      emerge that could potentially provide shareholders with greater


“Above all, Fairmont’s assets present opportunities for value enhancement and growth,” Mr. Fatt said. “Our plan has been to acquire, stabilize and monetize assets and deliver value back to all shareholders through share repurchases and dividends. Fairmont’s Board, through the Special Committee, is exploring alternatives to the Icahn Offer and will act in the best interest of Fairmont and its shareholders.”

A copy of the Directors’ Circular, which sets forth in greater detail the Board’s recommendation and the reasons therefor, is being mailed to all shareholders. Fairmont’s shareholders are strongly advised to read the Directors’ Circular because it contains important information. Shareholders may also obtain a copy of the Directors’ Circular from the Company’s investor website at .

Copies will also be available at the Canadian SEDAR website at and at the SEC’s website at . The Directors’ Circular is being included as an exhibit to Fairmont’s Solicitation/Recommendation Statement on Schedule 14D-9, which has been filed with the SEC.

UBS Securities LLC, Avington International and Scotia Capital Inc. all acted as financial advisors to Fairmont. As well, McCarthy Tetrault LLP and Skadden, Arps, Slate, Meagher & Flom LLP have been engaged as the Company’s legal advisors. Fasken Martineau DuMoulin LLP has been retained to provide legal advice to the Special Committee.