The investment consortium led by Sol and Butch Kerzner has agreed to pay more money to buy all the outstanding shares of Kerzner International, upping the cash price per share from $76 to $81.
The $3.8 billion transaction clears a major hurdle in the consortium's bid to take Kerzner International private, although the deal still hinges on approval from Kerzner International shareholders and regulatory approvals before it can be finalized.
Once the deal is closed, Kerzner International will become a privately held company and its stock will no longer be traded on the New York Stock Exchange (NYSE).
According to Kerzner International, the deal does not change Kerzner's plans for further development in the Bahamas, as "all projects in the Bahamas will continue as planned, including Atlantis Phase III on Paradise Island, Condo Hotel, Dolphin Experience and Athol Island Golf Course."
Kerzner International CEO Butch Kerzner told the Journal why going private is a good thing.
"Going private will provide Kerzner's management team with additional flexibility to focus on the long-term growth and success of the company. Equally, teaming up with such high-caliber investment partners gives Kerzner the global reach and commitment to continue to develop and expand the business in the Bahamas and beyond," he said.
Mr. Kerzner, calling the Bahamas "an essential part of our growth plan," added that his family and the new partners "look forward to continuing our development of Paradise Island into one of the world's great resort destinations."
According to a statement released by Kerzner International, "it will be business as usual (after the deal is completed) for the operations of the company, and the management and employees will retain their current positions after the transaction closes."
The statement quotes Butch Kerzner as saying, "We look forward to closing this deal as soon as possible."
The consortium of investors that will take over the company includes Istithimar PJSC, Whitehall Street Global Real Estate Ltd. Partnership 2005, Colony Capital LLC, Providence Equity Partners and The Related Companies, L.P., and Sol and Butch Kerzner, who will remain as Chairman and CEO.
The Kerzners and Istithimar – an investment house based in the United Arab Emirates – together own about 24% of the company's stock.
Whitehall is the primary real estate investment vehicle of Goldman, Sachs and Co., with $50 billion worth investments in 20 countries across a variety of real estate interests.
Colony Capital is a private investment firm also focusing primarily on real estate, with investments exceeding $20 billion. Colony has offices in Beirut, Hawaii, Hong Kong, Paris and elsewhere.
Providence Equity is headquartered in Rhode Island, and is another multibillion-dollar private investment firm, this one specializing in media and entertainment, communications and information companies around the world.
The Related Companies developed the 2.8 million square foot Time Warner Center, in Columbus Circle of New York City.
The $81 per share offer was higher than the Kerzner-led investment group's previous offer of $76 per share, and a 72% increase over the price at which Kerzner listed its Bahamian Depository Receipts in July 2004.
Kerzner will also continue pursuing its joint-ventures in Dubai and Morocco, as well as a casino in Singapore.
In Dubai, Kerzner plans to open a 1500-room water-themed resort dubbed Atlantis, The Palm, and a multibillion-dollar residential development called The Palm, Jumeirah.
By: Quincy Parker, The Bahama Journal
