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Kingdom & Colony Create Global Hotel Leader

Kingdom & Colony Create Global Hotel Leader

Category: Worldwide -
This is a press release selected by our editorial committee and published online for free on 2006-05-12

Fairmont Hotels & Resorts Inc. ("Fairmont" or the "Company") (TSX/NYSE: FHR) today announced that the previously announced Plan of Arrangement has been completed and all of Fairmont's outstanding common shares have been acquired by a company (the "Purchaser") owned by affiliates of Kingdom Hotels International and Colony Capital. Under the terms of the Plan of Arrangement, the Company's shareholders will receive US$45.00 in cash for each Fairmont common share held. With the completion of the transaction, the Fairmont and Raffles' portfolios will now be combined, transforming the companies into a global hotel leader headquartered in Toronto, with 120 hotels in 23 countries under four brands (Fairmont, Raffles, Swissotel and Delta).

"We are very excited about this transaction as it creates an expanded foundation from which to build on our legacy, grow our brand and create significant opportunities for our employees. With an expanding global 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 a long time investor in Fairmont, Kingdom has recognized the Company's value and potential, which is attributable to the dedication and professionalism of its management and employees. We look forward to working with Colony to build on the success of these brands and to further expand this irreplaceable collection of properties around the world."

"Our partnership with HRH Prince Alwaleed in this global hotel company fulfills our mission to invest with world class partners in irreplaceable assets with proven management teams," commented Thomas J. Barrack, Jr., Chairman and Chief Executive Officer of Colony. "Fairmont and Raffles are an excellent strategic fit with rich histories, creating a brand-focused company with an expansive global footprint that is dedicated to serve as the destination of choice for the world's most discriminating travelers."

The Purchaser's tender offer for Fairmont's outstanding 3.75% Convertible Senior Notes due 2023 (the "Notes") expired at 5:00 p.m. EST on May 10, 2006. The Purchaser has advised Fairmont that, at the closing of the tender offer, $267 million aggregate principal amount, or approximately 99%, of the $270 million aggregate principal amount of issued and outstanding Notes had been tendered for purchase. Fairmont intends to satisfy any conversion on the remaining outstanding Notes by way of a cash payment.

Fairmont shareholders who hold their Fairmont shares through a broker or other financial intermediary will receive payment of the purchase price for their shares following the deposit by the broker or financial intermediary of share certificates with Computershare Investor Services Inc., the Depositary for the Plan of Arrangement. Shareholders who hold their Fairmont shares in registered form will receive payment of the purchase price following the deposit of their Fairmont share certificates with the Depositary in accordance with the instructions contained in the Letter of Transmittal previously sent to registered shareholders. Any questions regarding payment of the purchase price, including any request for an additional copy of the Letter of Transmittal, should be directed to the Depositary via telephone at 1.866.982.9701 (toll free in North America) or 514.982.7139 or via email at

With the completion of the Plan of Arrangement, Fairmont's common shares will cease to be listed for trading on the New York Stock Exchange and the Toronto Stock Exchange.

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