- Fairmont and Raffles to Combine, Creating a US$5.5 Billion Global
Luxury Hotel Leader - TORONTO, Jan. 30 /PRNewswire-FirstCall/ --
Fairmont Hotels & Resorts Inc. ("Fairmont" or the "Company")
(TSX/NYSE: FHR) today announced that it has entered into an
Acquisition Agreement whereby a Canadian company owned by Kingdom
Hotels International ("Kingdom") and Colony Capital ("Colony") will
acquire all of Fairmont's outstanding common shares 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's Board has agreed to
recommend to its shareholders that they vote in favor of the
transaction. The Board confirmed its previous recommendation of
December 21, 2005 to reject the Icahn bid and not to tender to the
Icahn bid. 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. Raffles owns and
manages a portfolio of 33 properties located primarily across Asia
and Europe, including its flagship property built in 1887, the
Raffles Hotel, Singapore. "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. "As previously
announced, the Fairmont Board created a Special Committee to review
options for maximizing value for our shareholders. This review was
thorough and dynamic, and it attracted significant interest from a
number of parties. Following the presentation of the results of
this review by the Special Committee, and the Special Committee's
recommendation, the Fairmont Board has unanimously recommended the
transaction with Kingdom and Colony." "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. "We look forward to
working with our partners who are committed to building on the
success of our Company." 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. A proxy circular will be prepared and mailed to
shareholders in March providing shareholders with important
information about the transaction. Once mailed, the proxy circular
will be available at the Canadian SEDAR website at
http://www.sedar.com/ and at the SEC's website at
http://www.sec.gov/. All shareholders are urged to read the proxy
circular once it is available. The closing is subject to certain
other customary conditions, including regulatory approvals. The
closing of the transaction is not subject to any financing
condition. The proposed transaction is expected to close in the
second quarter of 2006, shortly after receipt of shareholder and
court approvals. UBS Investment Bank, Avington International and
Scotia Capital Inc. acted as financial advisors to Fairmont. J.P.
Morgan Securities Inc. acted as financial advisor to Kingdom and
Colony. This news release contains certain forward-looking
statements relating, but not limited to, Fairmont's operations,
anticipated financial performance, business prospects and
strategies. Forward-looking information typically contains
statements with words such as "anticipate", "believe", "expect",
"plan", "estimate", "guidance", "aim" or similar words suggesting
future outcomes. Such forward-looking statements are subject to
risks, uncertainties and other factors, which could cause actual
results to differ materially from future results expressed,
projected or implied by such forward-looking statements. Such
factors include, but are not limited to, economic, competitive and
lodging industry conditions. These risks are further described in
Fairmont's filings with Canadian securities regulatory authorities
(http://www.sedar.com/) and with the U.S. Securities and Exchange
Commission website (http://www.sec.gov/). All forward-looking
statements in this news release are qualified by these cautionary
statements. These statements are made as of the date of this news
release and except as required by applicable law, Fairmont
disclaims any responsibility to update any such forward-looking
statements, whether as a result of new information, future events
or otherwise. About Fairmont Hotels & Resorts Inc. FHR is a
leading owner/operator of luxury hotels and resorts. FHR's managed
portfolio consists of 87 luxury and first-class properties with
approximately 34,000 guestrooms in the United States, Canada,
Mexico, Bermuda, Barbados, United Kingdom, Monaco, Kenya and the
United Arab Emirates as well as two vacation ownership properties
managed by Fairmont Heritage Place. FHR owns Fairmont Hotels Inc.,
North America's largest luxury hotel management company, as
measured by rooms under management, with 49 distinctive city center
and resort hotels including The Fairmont San Francisco, The
Fairmont Banff Springs and The Fairmont Scottsdale Princess. FHR
also owns Delta Hotels, Canada's largest first-class hotel
management company, which manages and franchises 38 city center and
resort properties in Canada. In addition to hotel management, FHR
holds real estate interests in 21 properties and an approximate 24%
investment interest in Legacy Hotels Real Estate Investment Trust,
which owns 24 properties. FHR owns FHP Management Company LLC, a
private residence club management company that operates Fairmont
Heritage Place, a vacation ownership business. About Kingdom Hotels
International Kingdom is owned by a trust for the benefit of HRH
Prince Alwaleed bin Talal bin Addulaziz Alsaud and his family. HRH
Prince Alwaleed and related trusts and other entities have made
substantial investments in multiple sectors including banking,
hotels, media, telecommunications, technology, construction and
real estate, entertainment, and upscale fashion, among numerous
others. Significant hotel-related investments include interests in
Fairmont Hotels & Resorts, Four Seasons Hotels and Resorts, the
George V Hotel and Movenpick Hotels & Resorts, covering more
than 260 hotels throughout the U.S., the Middle East and Africa.
Significant investments in other sectors include interests in
Citigroup, News Corp., Time Warner, Motorola, Apple Computers,
Ballast Nedam, Canary Wharf, Disneyland Paris, Saks Inc. and
Kingdom Center. About Colony Capital Founded in 1991 by Chairman
and Chief Executive Officer Thomas J. Barrack Jr., Colony is a
private, international investment firm focusing primarily on real
estate-related assets and operating companies. At the completion of
this transaction, Colony will have invested more than $20 billion
in over 8,000 assets through various corporate, portfolio and
complex property transactions. The firm owns Raffles Hotels &
Resorts, the legendary Costa Smeralda resort in Sardinia, Italy and
Hotel Guanahani in St. Barts. Colony's other investments in
exclusive leisure lifestyle and resort properties have included the
Amanresorts hotel chain, London's Savoy Group, the Orchid at Mauna
Lani on Hawaii's Big Island, The Stanhope Hotel in New York City,
the "W" in Honolulu, the Mayfair in Miami, Resorts International in
Atlantic City, Atlantic City Hilton, Las Vegas Hilton, Accor
Casinos in Europe, and the Sunrise Colony Country Club communities.
Colony has a staff of more than 110 and is headquartered in Los
Angeles, with offices in Beirut, Boston, Hawaii, Hong Kong, London,
Madrid, New York, Paris, Rome, Seoul, Shanghai, Singapore, Taipei,
and Tokyo. About Raffles Hotels & Resorts Raffles is a
collection of 33 luxury hotels, including 23 Swissotels, located in
major cities around the globe that distinguishes itself through the
highest standards of products and services. Each hotel is a
landmark in its respective city and most are positioned at the top
of their local markets. The collection of legendary hotels includes
Raffles Hotel and Raffles The Plaza in Singapore, Raffles Grand
Hotel d'Angkor, Siem Reap, Cambodia, Raffles Hotel Le Royal, Phnom
Penh, Cambodia, Raffles L'Ermitage Beverly Hills in the US, Raffles
Resort Canouan Island, The Grenadines, Raffles Hotel Vier
Jahreszeiten, Hamburg, Germany and Raffles Le Montreux Palace,
Montreux, Switzerland. Raffles will open the new Raffles properties
in Beijing in mid-2006 and and Dubai in 2007.
(http://www.raffles.com/) DATASOURCE: Fairmont Hotels & Resorts
Inc. CONTACT: For Fairmont: Investors - Emma Thompson, Investor
Relations, Fairmont Hotels & Resorts Inc., Tel: (416) 874-2485,
Email: , Website: http://www.fairmont.com/; U.S. Media - Daniel
Gagnier, Citigate Sard Verbinnen, Tel: (212) 687-8080, Email: ,
Website: http://www.sardverb.com/; Canadian Media - Bruce
MacLellan, Environics Communications Inc., Tel: (416) 969-2727,
Email: , Website: http://www.environicspr.com/; For Kingdom:
Charles Henry, Hotel Capital Advisers, Inc., Tel: (212) 599-5151,
Email: ; For Colony: Owen Blicksilver, Owen Blicksilver PR, Inc.,
Tel (516) 742-5950, Email: , Website: http://www.blicksilverpr.com/
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