Fairmont Hotels & Resorts Inc. Sells The Fairmont Orchid, Hawaii for $250 million
Westbrook Partners and Fairmont Sign Long-term Management Contract
TORONTO, Canada, December 23, 2005. Fairmont Hotels & Resorts Inc. ("Fairmont" or the "Company") today announced that it has sold The Fairmont Orchid, Hawaii to Westbrook Partners ("Westbrook") for $250 million. The resort will continue to be known as The Fairmont Orchid, Hawaii and will be managed by Fairmont under a long-term management contract.
In December 2002, the Company purchased The Fairmont Orchid for $140 million. With the completion of this sale, Fairmont will realize a pre-tax gain of approximately $109 million. Fairmont is considering a number of alternatives for the sale proceeds, which it expects to reinvest in other hotel assets.
"This is an attractive time to capitalize on our success with The Fairmont Orchid, Hawaii. In the three years that we have owned this resort, it has enjoyed solid growth in operating performance as a result of our experience in luxury resort management and Fairmont's strong brand presence in the California market," commented William R. Fatt, Chief Executive Officer of FHR. "Importantly, this sale is another example of the underlying value of many of Fairmont's world-class assets. In addition, it supports our strategy of acquiring attractive assets, realizing the value created through improved performance and then redeploying the capital to continue growing the Company."
Added Mr. Fatt, "We have been in discussions with Westbrook for some time regarding the sale of this property and are pleased to have the opportunity to work with such a well-respected hotel investor. Westbrook's breadth of experience in real estate investing, specifically within the lodging industry, makes it an ideal partner as we seek to grow the Fairmont brand."
Paul D. Kazilionis, Managing Principal and Chief Executive Officer, commented, "We are pleased to add this luxury resort in a high barrier-to- entry destination to our portfolio and we look forward to partnering with Fairmont to further build on the reputation of The Fairmont Orchid, Hawaii. In addition, our significant experience with residential development on the Big Island of Hawaii allows us to explore creative ways to maximize value at this property." Continued Mr. Kazilionis, "We hope this partnership is the first of many opportunities to expand our relationship with Fairmont as we seek future hotel acquisitions that Fairmont could manage."
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