Canadian hotel group Fairmont has been saved from a hostile takeover, after its board agreed to be acquired by Kingdom Hotels and Colony Capital.
Fairmont’s board unanimously recommended the deal to shareholders and reconfirmed its previous rejection of the bid by international corporate raider Carl Icahn in December last year.
Kingdom Hotels is a trust for HRH Prince Alwaleed bin Talal bin Abdulaziz Alsaud.
The prince is also a personal shareholder in Fairmont, and owner of a number of properties managed by Fairmont.
He said: “As one of Fairmont’s current shareholders and strategic partners, Kingdom has long recognised the company’s existing value and potential. We look forward to partnering with Colony and working with both Fairmont and Raffles’ management to take the combined companies to a new level of achievement.”
Fairmont’s board has recommend selling the company’s shares for $45 (£25.4) each in a deal worth $5.5b (£3.1b).
It represents a 28% premium over Fairmont’s closing share price before bids began in November 2004.
If this offer is accepted by shareholders, Fairmont will be taken private.
Under the terms of the new deal, both Fairmont and Raffles hotels will continue running as independent brands. The portfolio will comprise 120 hotels in 24 countries.
By Emily Manson