Fairmont is being acquired by a Canadian company owned by Kingdom Hotels International (“Kingdom”) and Colony Capital (“Colony”) at a price of US$45.00 per share in cash. The total value of this transaction, including debt and the combination with Raffles, is expected to be approximately US$5.5 billion (or US$3.9 billion, without giving effect to the Raffles combination).
This all-cash transaction for 100% of the Company’s shares represents a 28% premium over Fairmont’s closing share price on November 4, 2005, the last trading day on the NYSE prior to the public expressions of interest in the Company, and exceeds the highest trading price of the shares.
The transaction has been unanimously approved by Fairmont’s Board of Directors following receipt of the recommendation of a Special Committee of the Board.
Fairmont has been advised by Kingdom and Colony of their intention to combine the Fairmont and Raffles portfolios following the completion of the transaction, transforming the companies into a luxury global hotel leader with 120 hotels in 24 countries. Fairmont will remain an independent hotel management and ownership company headquartered in Canada and Raffles, based in Singapore, will also retain its independent brand identity.
“This transaction is the ideal means of delivering significant, immediate value to the Company’s current shareholders while preserving this Canadian- based company and establishing a solid platform from which to grow,” stated Peter C. Godsoe, Chairman of Fairmont’s Board of Directors.
“We are very excited about this transaction as it delivers value to our shareholders and creates an expanded foundation from which to build on our legacy, grow our brand and create significant opportunities for our employees. With an expanding international portfolio of exceptional resorts and gateway city properties, our guests will be exposed to new, exciting destinations with different cultures,” said William R. Fatt, Fairmont’s Chief Executive Officer.
HRH Prince Alwaleed bin Talal bin Abdulaziz Alsaud of Kingdom said, “As one of Fairmont’s current shareholders and strategic partners, Kingdom has long recognized the Company’s existing value and potential. Fairmont’s success is clearly attributable to the dedication and professionalism of its management and employees. We look forward to partnering with Colony and working with both Fairmont and Raffles’ management to take the combined companies to a new level of achievement.” Kingdom and its affiliates own 3,875,000 common shares of Fairmont.
“Colony’s mission is to make major investments with world class partners in irreplaceable assets managed by proven management teams. Our partnership with HRH Prince Alwaleed and our investments in Fairmont and Raffles fulfill our mission,” commented Thomas J. Barrack, Jr., Chairman and Chief Executive Officer of Colony. “Fairmont and Raffles are an excellent strategic fit with rich histories, global brand recognition and complementary destinations. Joining the two luxury companies creates an ideal platform for continued international expansion.”
The transaction is to be carried out by way of a statutory plan of arrangement and, accordingly, will be subject to the approval of 66 2/3% of the votes cast by Fairmont’s shareholders at a meeting of shareholders, currently anticipated to take place in April, as well as court approval.