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Press Release: Kerzner International Limited
March 21, 2006
PARADISE ISLAND, Bahamas -- 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,
yesterday 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:
Kerzner International Limited
Coral Towers
Paradise Island, The Bahamas
+1.242.363.6018
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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Contact: Kerzner International Limited, Paradise Island Investors: Omar Palacios, 242-363-6018 Omar.Palacios@kerzner.com or Media: Lauren Snyder, 242-363-6018 Lauren.Snyder@kerzner.com or Joele Frank, Wilkinson Brimmer Katcher Judith Wilkinson / Laura Smith, 212-355-4449 or Investor Group Contacts: Brunswick Group Steve Lipin / Robert Mead, 212-333-3810
Source: Kerzner International Limited