Canada’s Fairmont Hotels & Resorts (FHR) announced today that a subsidiary of the US-based Kingdom Hotels, an affiliate of a trust created by Prince Al-Waleed Bin Talal Bin Abdulaziz Al-Saud, has signed an agreement to exchange its 16.5 percent interest in Fairmont Hotels Inc, the Fairmont management company, for shares of the public company FHR.
As a result of this transaction, Kingdom will acquire approximately four percent of FHR's outstanding shares. The transaction will result in the issuance of not more than 3,450,000 shares and not less than 2,875,000 shares, depending on certain future events.
Commenting on the announcement, Prince Al-Waleed, the president of Kingdom, said, "Kingdom's investment is intended to be a long-term holding and we look forward to our continued relationship with FHR."
Upon the closing of this transaction, which is expected to take place in the third quarter following the obtaining of all regulatory approvals, FHR will increase its interest in FHI from 67 percent to 83.5 percent. A partnership managed by Maritz, Wolff & Co. will continue to hold the balance of 16.5 percent.
The shareholder agreement between FHR and the Maritz, Wolff & Co. partnership, which provides for certain rights as between the parties as shareholders, will remain in force. These rights include the Maritz, Wolff & Co. partnership's right to put its FHI shares to FHR and each shareholder's right to acquire the other's position in certain events.
Separately, FHR announced that, in light of the drop in the market value of share prices in the lodging industry, FHR intends to actively repurchase its shares in the market over the next several months pursuant to its normal course issuer bid.
FHR owns and operates luxury hotels and resorts, its portfolio consists of 78 luxury and first class properties with approximately 31,000 rooms in Canada, the United States, Mexico, Bermuda, Barbados and the United Arab Emirates (UAE). It currently holds a 67 percent controlling interest in FHI, North America's largest luxury hotel management company. — (menareport.com)
© 2002 Mena Report (www.menareport.com)
