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Saudi prince buys Fairmont
Jan. 30, 2006. 11:18 AM
CANADIAN PRESS
Another Canadian corporate monument is toppling into foreign hands with a deal for Fairmont Hotels & Resorts Inc. to be bought by a Saudi prince and a U.S. property magnate.
Fairmont, which originated in the historic Canadian Pacific Railway luxury hotel chain and counts the Chateau Laurier, Royal York and Banff Springs among its properties, said Monday its board is supporting an offer of $3.3 billion (U.S.) in cash, about $3.8 billion (Canadian), from Kingdom Hotels International and Colony Capital.
Including assumed debt, the deal is valued at $3.9 billion (U.S.) or $4.5 billion (Canadian).
Kingdom Hotels is owned by Saudi Prince Alwaleed bin Talal, a global investor listed by Forbes magazine as the world’s fifth-richest person with a net worth of $23.7 billion (U.S.).
Colony Capital is a Los Angeles private equity firm run by Tom Barrack, recently described by Fortune magazine as the world’s best real estate investor.
The Fairmont announcement came five days after Hudson’s Bay Co., Canada’s oldest corporation, agreed to be taken over by American businessman Jerry Zucker.
Fairmont, which earlier rejected a partial takeover bid by U.S. billionaire Carl Icahn, said Kingdom and Colony will pay $45 (U.S.) a share, or about $51.50 (Canadian) at Monday morning’s exchange rate.
Fairmont shares rose 31 cents to $50.77 (Canadian) on the Toronto Stock Exchange and 40 cents to $44.22 (U.S.) in New York after Monday morning’s news.
The offer price is a slight premium to Fairmont’s price of $43.82 Friday on the New York Stock Exchange. It’s a 28 per cent premium over the price Nov. 4 when Icahn made his move, assembling a 10 per cent stake in Fairmont and bidding $40 (U.S.) per share for 51 per cent of the company.
Fairmont’s board is unanimously endorsing the Kingdom-Colony offer.
“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 chairman Peter Godsoe.
Kingdom and Colony plan to combine Fairmont with the Asian-based Raffles chain owned by Colony to create a “luxury global hotel leader†with 120 properties in 24 countries.
Fairmont would continue to be based in Canada, and Raffles would also remain a separate brand.
The Toronto-based chain owns and operates 87 hotels with about 34,000 guest rooms in Canada, the United States, Mexico, Bermuda, Barbados, Britain, Monaco, Kenya and the United Arab Emirates.
Fairmont also owns Delta Hotels, which manages and franchises 38 properties.
Saudi prince buys Fairmont
Jan. 30, 2006. 11:18 AM
CANADIAN PRESS
Another Canadian corporate monument is toppling into foreign hands with a deal for Fairmont Hotels & Resorts Inc. to be bought by a Saudi prince and a U.S. property magnate.
Fairmont, which originated in the historic Canadian Pacific Railway luxury hotel chain and counts the Chateau Laurier, Royal York and Banff Springs among its properties, said Monday its board is supporting an offer of $3.3 billion (U.S.) in cash, about $3.8 billion (Canadian), from Kingdom Hotels International and Colony Capital.
Including assumed debt, the deal is valued at $3.9 billion (U.S.) or $4.5 billion (Canadian).
Kingdom Hotels is owned by Saudi Prince Alwaleed bin Talal, a global investor listed by Forbes magazine as the world’s fifth-richest person with a net worth of $23.7 billion (U.S.).
Colony Capital is a Los Angeles private equity firm run by Tom Barrack, recently described by Fortune magazine as the world’s best real estate investor.
The Fairmont announcement came five days after Hudson’s Bay Co., Canada’s oldest corporation, agreed to be taken over by American businessman Jerry Zucker.
Fairmont, which earlier rejected a partial takeover bid by U.S. billionaire Carl Icahn, said Kingdom and Colony will pay $45 (U.S.) a share, or about $51.50 (Canadian) at Monday morning’s exchange rate.
Fairmont shares rose 31 cents to $50.77 (Canadian) on the Toronto Stock Exchange and 40 cents to $44.22 (U.S.) in New York after Monday morning’s news.
The offer price is a slight premium to Fairmont’s price of $43.82 Friday on the New York Stock Exchange. It’s a 28 per cent premium over the price Nov. 4 when Icahn made his move, assembling a 10 per cent stake in Fairmont and bidding $40 (U.S.) per share for 51 per cent of the company.
Fairmont’s board is unanimously endorsing the Kingdom-Colony offer.
“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 chairman Peter Godsoe.
Kingdom and Colony plan to combine Fairmont with the Asian-based Raffles chain owned by Colony to create a “luxury global hotel leader†with 120 properties in 24 countries.
Fairmont would continue to be based in Canada, and Raffles would also remain a separate brand.
The Toronto-based chain owns and operates 87 hotels with about 34,000 guest rooms in Canada, the United States, Mexico, Bermuda, Barbados, Britain, Monaco, Kenya and the United Arab Emirates.
Fairmont also owns Delta Hotels, which manages and franchises 38 properties.