Kerzner Amends Agreement for Sale to Investor Group, Ends Auction
May 01 2006 - 7:00AM
Business Wire
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 amended the definitive agreement under which the Company
will be acquired by the investor group to increase the price per
ordinary share from $76.00 to $81.00 in cash. As a result, the
Company has agreed to terminate its solicitation of superior
proposals announced on March 20, 2006. The Company has also agreed
that the transaction cannot be terminated prior to a stockholder
vote without the consent of the investor group. The aggregate
transaction value, including the assumption of $599 million of net
debt as of December 31, 2005, is approximately $3.8 billion. 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 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 revised terms of 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 revised
merger agreement with the assistance of its financial and legal
advisors. 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. 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. In the
event the merger agreement is terminated under specified
circumstances, the investor group will receive a break-up fee of 3%
of the equity value of the transaction (approximately $95 million).
The Company noted that it remains fully committed to all of its
current development and expansion plans as scheduled, including its
Phase III expansion on Paradise Island and its joint ventures in
Dubai and Morocco. Furthermore, the Company 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. 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 amended transaction, which will
include the amended and restated 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 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 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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