Fairmont hotel chain acquired for $5.5 billion
Fairmont Hotels & Resorts Inc., the largest luxury hotel company in North America, is being acquired by Kingdom Hotels and Colony Capital in a deal worth $5.5 billion.
Kingdom and Colony will combine the Toronto-based Fairmont with the Asian-based Raffles hotel chain owned by Colony to create what it calls a “luxury global hotel leader.” It will have 120 hotels in 24 countries.
Said Thomas J. Barrack Jr., chairman and CEO of Colony:
“Fairmont and Raffles are an excellent strategic fit with rich histories, global brand recognition and complementary destinations.”
Said William R. Fatt, Fairmont’s CEO:
“With an expanding international portfolio of exceptional resorts and gateway city properties, our guests will be exposed to new, exciting destinations with different cultures.”
Fairmont will remain an independent hotel management and ownership company based in Toronto. It has 87 hotels with 34,000 guest rooms around the world, including the historic Chateau Frontenac in Quebec and Banff Springs in Alberta, Canada.
Raffles, based in Singapore, will also retain its independent brand. Raffles owns and manages a portfolio of 33 properties, including its flagship, the Raffles Hotel, Singapore.
Kingdom Hotels International is owned by a trust for the benefit of HRH Prince Alaweed bin Talal bin Addulaziz Alsaud and his family. Their investments include shares in Fairmont.
Colony Capital founded in 1991 is a private, international investment firm focusing primarily on real estate-related assets and operating companies.
Under terms of the transaction, Kingdom Hotels and Colony Capital will acquire all of Fairmont’s outstanding common shares at a price of $45 a share.
The proposed transaction is expected to close in the second quarter of 2006, shortly after receipt of shareholder and court approvals.
Report by David Wilkening
David
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