Kerzner Amends Agreement for Sale to Investor Group, Ends Auction
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, 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.
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 .
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 (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 .
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.
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.