Kerzner International Limited (NYSE:KZL) (the "Company"), through
its subsidiaries a leading international developer and operator of
destination resorts, casinos and luxury hotels, and an investor
group which is being led by the Company's Chairman, Sol Kerzner and
its Chief Executive Officer, Butch Kerzner, today announced that
they have entered into a definitive agreement under which the
Company will be acquired by the investor group for $76.00 in cash
per outstanding ordinary share. The investor group also includes
Istithmar PJSC ("Istithmar"), which is a significant shareholder of
the Company, Whitehall Street Global Real Estate Limited
Partnership 2005, Colony Capital LLC, Providence Equity Partners,
Inc. and The Related Companies, L.P., which is affiliated with one
of the Company's Directors. The aggregate transaction value,
including the assumption of $599 million of net debt as of December
31, 2005, is approximately $3.6 billion. The Board of Directors of
the Company, upon the unanimous recommendation of a Special
Committee of Directors formed to evaluate the terms of the
transaction, has approved the merger agreement. The Special
Committee, which includes representatives of two significant
shareholders that are not affiliated with the investor group,
negotiated the price and other terms of the merger agreement with
the assistance of its financial and legal advisors. In accordance
with the merger agreement, the Company and the Special Committee's
advisors, working under the supervision of the Special Committee,
will actively solicit superior proposals during the next 45 days.
The Kerzners and Istithmar have agreed to cooperate in this
solicitation process. In the event the merger agreement is
terminated, in order for the Company to enter into a superior
transaction arising during the 45-day solicitation period, the
investor group will receive a break-up fee of 1% of the equity
value of the transaction (approximately $30 million). In addition,
in the event of a superior transaction, Sol and Butch Kerzner have
agreed to provide certain transitional services to the acquiring
party for a period of six months and, in the event of certain
all-cash acquisitions, to vote in favor of the superior
transaction. The Company noted that there can be no assurance that
the solicitation of superior proposals will result in an
alternative transaction. The Company does not intend to disclose
developments with respect to the solicitation process unless and
until its Board of Directors has made a decision. "We believe that
the acquisition by the investor group represents an excellent
opportunity for the Company's shareholders, and in addition, we
will be actively soliciting other offers to ensure that value is
maximized for all of our shareholders," said Eric Siegel, Chairman
of the Special Committee of the Board of Directors. "We are
delighted to be able to move forward with this transaction. The
Company remains fully committed to all of its current development
and expansion plans as scheduled, including our Phase III expansion
on Paradise Island and our joint ventures in Dubai and Morocco.
Furthermore, our entire team remains focused on and committed to
developing an outstanding proposal in connection with one of the
two casino licenses to be issued by the Government of Singapore,"
said Butch Kerzner, Chief Executive Officer of the Company. "My
father's and my confidence in the business is reflected by the fact
that we will increase our ownership interest in the Company to
about 25% upon the completion of this transaction. Throughout this
process, it will remain business as usual for all of our operations
and we anticipate that all employees, including the existing
management team, will retain their current positions after our
transaction closes." The transaction is expected to close in
mid-2006 and is subject to certain terms and conditions customary
for transactions of this type, including the receipt of financing
and regulatory approvals. Deutsche Bank Securities Inc. and Goldman
Sachs Credit Partners have provided commitments to the investor
group for the debt portion of the financing for the transaction.
The transaction also requires approval of the merger agreement by
the Company's shareholders. The Kerzners and Istithmar, which
together own approximately 24% of the Company's ordinary shares,
have agreed to vote in favor of the transaction. Upon the
completion of the transaction, Sol Kerzner will remain Chairman of
the Company and will continue to oversee the development and
construction of the Company's projects, and Butch Kerzner will
remain Chief Executive Officer. The Company will schedule a special
meeting of its shareholders for the purpose of obtaining
shareholder approval. Upon completion of the transaction, the
Company will become a privately held company and its common stock
will no longer be traded on The New York Stock Exchange. J.P.
Morgan Securities Inc. is serving as financial advisor and Cravath,
Swaine & Moore LLP and Paul, Weiss, Rifkind, Wharton &
Garrison LLP are serving as legal advisors to the Special Committee
of the Company's Board of Directors. Deutsche Bank AG and Groton
Partners LLC are serving as financial advisors and Simpson Thacher
& Bartlett LLP is serving as legal advisor to the investor
group. Additional Information The Company will furnish to the
Securities and Exchange Commission (the "SEC") a report on Form 6-K
regarding the transaction, which will include the merger agreement
and related documents. All parties desiring details regarding the
transaction are urged to review these documents, which are
available at the SEC's website at http://www.sec.gov. In connection
with the proposed transaction, the Company will prepare and mail a
proxy statement to its shareholders. In addition, certain
participants in the proposed transaction will prepare and mail to
the Company's shareholders a Schedule 13E-3 transaction statement.
These documents will be filed with or furnished to the SEC.
Shareholders are urged to read these materials and other material
filed with or furnished to the SEC carefully when they become
available, as they will contain important information about the
Company, the proposed transaction and related matters. In addition
to receiving the proxy statement and Schedule 13E-3 transaction
statement by mail, shareholders also will be able to obtain these
documents, as well as other filings containing information about
the Company, the proposed transaction and related matters, without
charge, from the SEC's website (http://www.sec.gov) or at the SEC's
public reference room at 100 F Street, NE, Room 1580, Washington,
D.C. 20549. In addition, these documents can be obtained, without
charge, by contacting the Company at the following address and/or
phone number: -0- *T Kerzner International Limited Coral Towers
Paradise Island, The Bahamas +1.242.363.6018 *T This information
will also be available at the Company's website at
http://www.kerzner.com. This announcement is neither a solicitation
of proxy, an offer to purchase nor a solicitation of an offer to
sell any securities. About The Company Kerzner International
Limited (NYSE:KZL), through its subsidiaries, is a leading
international developer and operator of destination resorts,
casinos and luxury hotels. The Company's flagship brand is
Atlantis, which includes Atlantis, Paradise Island, a 2,317-room,
ocean-themed destination resort located on Paradise Island, The
Bahamas. Development of a major expansion on Paradise Island is
currently underway and will include a 600-room, all-suite luxury
hotel and a significant enhancement of Atlantis's water-based
attractions. The Company is extending its Atlantis brand globally
with the development of Atlantis, The Palm, Dubai, an approximately
1,500-room, water-themed resort expected to open in late 2008,
currently being constructed on The Palm, Jumeirah, a multi-billion
dollar leisure and residential development in Dubai. In its gaming
segment, the Company developed and receives certain income derived
from Mohegan Sun in Uncasville, Connecticut, which has become one
of the premier casino destinations in the United States. In its
luxury resort hotel business, the Company manages ten resort hotels
primarily under the One&Only brand. The resorts, featuring some
of the top-rated properties in the world, are located in The
Bahamas, Mexico, Mauritius, the Maldives and Dubai. For more
information concerning the Company and its operating subsidiaries,
visit http://www.kerzner.com. This press release contains
forward-looking statements, which are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements involve risks and
uncertainties which are described in the Company's public filings
with the U.S. Securities and Exchange Commission. About Istithmar
Istithmar PJSC is a major investment house based in the United Arab
Emirates focusing on private equity, real estate and other
alternative investments. Established in 2003, Istithmar was created
with the key mission of earning exceptional returns for its
investors while maintaining due regard for risk. Istithmar, which
means investment in Arabic, applies global expertise with local
insights to coordinate the appraisal and implementation of various
opportunities. Istithmar's 'I' investment philosophy is based
around three core principles -- Ideas, Inquiry & Integrity --
sets the foundation for the firm which has a broad portfolio of
highly successful companies in markets from North America to Europe
to Asia to the Middle East. Established with an initial investment
capital pool of $2 billion, Istithmar has, to date, invested in 30
companies deploying approximately $1 billion in equity capital. It
currently focuses its activities in four industry verticals -
Consumer, Financial Services, Industrial and Real Estate. About
Whitehall The Whitehall Street Real Estate Funds are Goldman, Sachs
& Co.'s primary real estate investment vehicle. Goldman Sachs
manages the Whitehall Funds and is also Whitehall's largest
investor. Since 1991, Whitehall has invested approximately $16
billion of equity in real estate and other derivative investments
with a gross cost basis of approximately $50 billion. Its
investments have been made in 20 countries and include interests in
real estate assets, portfolio companies, non-performing loans,
mezzanine loans and other related products. 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. Colony
Capital 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 Providence
Equity Partners Providence Equity Partners Inc. is a global private
investment firm specializing in equity investments in media and
entertainment, communications and information companies around the
world. The principals of Providence Equity manage funds with over
$9 billion in equity commitments and have invested in more than 80
companies operating in over 20 countries since the firm's inception
in 1990. Providence Equity is headquartered in Providence, Rhode
Island and also has offices in New York and London. About The
Related Companies The Related Companies, L.P. was founded in 1972
by Chairman and CEO Stephen M. Ross. Related is headquartered in
New York City. To date, Related has developed or acquired real
estate assets worth over $10 billion with another $7 billion
currently in development. A fully integrated privately owned firm
with divisions in development, acquisitions, financial services,
property management, marketing and sales, Related is synonymous
with architectural and service excellence, and has significant
developments, partners and affiliates in Miami, Chicago, Boston,
Los Angeles and San Francisco. Related's historic development of
the 2.8 million square foot Time Warner Center has transformed
Columbus Circle into one of New York City's premier destinations
and has significantly increased the value of commercial and
residential property in the surrounding neighborhoods.
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