Kerzner (NYSE:KZL)
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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 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:
-0-
*T
Kerzner International Limited
Coral Towers
Paradise Island, The Bahamas
+1.242.363.6018
*T
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.