A definitive agreement has been reached whereby Kerzner International Limited will be acquired by an investor group led by the company chairman Sol Kerzner and CEO Butch Kerzner. 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 at US$3.6 billion includes the assumption of US$599 million of net debt as of 31 December 2005.
The Special Committee of Directors formed to evaluate the terms of the transaction unanimously recommended it, and the Board of Directors of Kerzner International has approved the merger agreement. In accordance with the merger agreement, superior proposals will be actively solicited over the next 45 days. Should a superior transaction arise, the investor group will receive a 1% break-up fee. 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.
"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.
He added, "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 favour of the transaction. (E-03.21.06)
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