Fairmont Announces Agreement To Be Acquired By Kingdom Hotels And Colony Capital

- Fairmont and Raffles to Combine, Creating a US$5.5 Billion Global

Luxury Hotel Leader -



Jan 30, 2006, 00:00 ET from Fairmont Hotels & Resorts Inc.

    TORONTO, Jan. 30 /PRNewswire-FirstCall/ - Fairmont Hotels & Resorts Inc.
 ("Fairmont" or the "Company") (TSX/NYSE:   FHR) today announced that it has
 entered into an Acquisition Agreement whereby a Canadian company owned by
 Kingdom Hotels International ("Kingdom") and Colony Capital ("Colony") will
 acquire all of Fairmont's outstanding common shares at a price of US$45.00 per
 share in cash. The total value of this transaction, including debt and the
 combination with Raffles, is expected to be approximately US$5.5 billion (or
 US$3.9 billion, without giving effect to the Raffles combination).
     This all-cash transaction for 100% of the Company's shares represents a
 28% premium over Fairmont's closing share price on November 4, 2005, the last
 trading day on the NYSE prior to the public expressions of interest in the
 Company, and exceeds the highest trading price of the shares.
     The transaction has been unanimously approved by Fairmont's Board of
 Directors following receipt of the recommendation of a Special Committee of
 the Board. Fairmont's Board has agreed to recommend to its shareholders that
 they vote in favor of the transaction. The Board confirmed its previous
 recommendation of December 21, 2005 to reject the Icahn bid and not to tender
 to the Icahn bid.
     Fairmont has been advised by Kingdom and Colony of their intention to
 combine the Fairmont and Raffles portfolios following the completion of the
 transaction, transforming the companies into a luxury global hotel leader with
 120 hotels in 24 countries. Fairmont will remain an independent hotel
 management and ownership company headquartered in Canada and Raffles, based in
 Singapore, will also retain its independent brand identity. Raffles owns and
 manages a portfolio of 33 properties located primarily across Asia and Europe,
 including its flagship property built in 1887, the Raffles Hotel, Singapore.
     "This transaction is the ideal means of delivering significant, immediate
 value to the Company's current shareholders while preserving this Canadian-
 based company and establishing a solid platform from which to grow," stated
 Peter C. Godsoe, Chairman of Fairmont's Board of Directors. "As previously
 announced, the Fairmont Board created a Special Committee to review options
 for maximizing value for our shareholders. This review was thorough and
 dynamic, and it attracted significant interest from a number of parties.
 Following the presentation of the results of this review by the Special
 Committee, and the Special Committee's recommendation, the Fairmont Board has
 unanimously recommended the transaction with Kingdom and Colony."
     "We are very excited about this transaction as it delivers value to our
 shareholders and creates an expanded foundation from which to build on our
 legacy, grow our brand and create significant opportunities for our employees.
 With an expanding international portfolio of exceptional resorts and gateway
 city properties, our guests will be exposed to new, exciting destinations with
 different cultures," said William R. Fatt, Fairmont's Chief Executive Officer.
 "We look forward to working with our partners who are committed to building on
 the success of our Company."
     HRH Prince Alwaleed bin Talal bin Abdulaziz Alsaud of Kingdom said, "As
 one of Fairmont's current shareholders and strategic partners, Kingdom has
 long recognized the Company's existing value and potential. Fairmont's success
 is clearly attributable to the dedication and professionalism of its
 management and employees. 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." Kingdom and its affiliates own
 3,875,000 common shares of Fairmont.
     "Colony's mission is to make major investments with world class partners
 in irreplaceable assets managed by proven management teams. Our partnership
 with HRH Prince Alwaleed and our investments in Fairmont and Raffles fulfill
 our mission," commented Thomas J. Barrack, Jr., Chairman and Chief Executive
 Officer of Colony. "Fairmont and Raffles are an excellent strategic fit with
 rich histories, global brand recognition and complementary destinations.
 Joining the two luxury companies creates an ideal platform for continued
 international expansion."
     The transaction is to be carried out by way of a statutory plan of
 arrangement and, accordingly, will be subject to the approval of 66 2/3% of
 the votes cast by Fairmont's shareholders at a meeting of shareholders,
 currently anticipated to take place in April, as well as court approval. A
 proxy circular will be prepared and mailed to shareholders in March providing
 shareholders with important information about the transaction. Once mailed,
 the proxy circular will be available at the Canadian SEDAR website at
 www.sedar.com and at the SEC's website at www.sec.gov. All shareholders are
 urged to read the proxy circular once it is available.
     The closing is subject to certain other customary conditions, including
 regulatory approvals. The closing of the transaction is not subject to any
 financing condition. The proposed transaction is expected to close in the
 second quarter of 2006, shortly after receipt of shareholder and court
 approvals.
     UBS Investment Bank, Avington International and Scotia Capital Inc. acted
 as financial advisors to Fairmont. J.P. Morgan Securities Inc. acted as
 financial advisor to Kingdom and Colony.
 
     This news release contains certain forward-looking statements relating,
 but not limited to, Fairmont's operations, anticipated financial performance,
 business prospects and strategies. Forward-looking information typically
 contains statements with words such as "anticipate", "believe", "expect",
 "plan", "estimate", "guidance", "aim" or similar words suggesting future
 outcomes. Such forward-looking statements are subject to risks, uncertainties
 and other factors, which could cause actual results to differ materially from
 future results expressed, projected or implied by such forward-looking
 statements. Such factors include, but are not limited to, economic,
 competitive and lodging industry conditions. These risks are further described
 in Fairmont's filings with Canadian securities regulatory authorities
 (www.sedar.com) and with the U.S. Securities and Exchange Commission website
 (www.sec.gov). All forward-looking statements in this news release are
 qualified by these cautionary statements. These statements are made as of the
 date of this news release and except as required by applicable law, Fairmont
 disclaims any responsibility to update any such forward-looking statements,
 whether as a result of new information, future events or otherwise.
 
     About Fairmont Hotels & Resorts Inc.
     FHR is a leading owner/operator of luxury hotels and resorts. FHR's
 managed portfolio consists of 87 luxury and first-class properties with
 approximately 34,000 guestrooms in the United States, Canada, Mexico, Bermuda,
 Barbados, United Kingdom, Monaco, Kenya and the United Arab Emirates as well
 as two vacation ownership properties managed by Fairmont Heritage Place. FHR
 owns Fairmont Hotels Inc., North America's largest luxury hotel management
 company, as measured by rooms under management, with 49 distinctive city
 center and resort hotels including The Fairmont San Francisco, The Fairmont
 Banff Springs and The Fairmont Scottsdale Princess. FHR also owns Delta
 Hotels, Canada's largest first-class hotel management company, which manages
 and franchises 38 city center and resort properties in Canada. In addition to
 hotel management, FHR holds real estate interests in 21 properties and an
 approximate 24% investment interest in Legacy Hotels Real Estate Investment
 Trust, which owns 24 properties. FHR owns FHP Management Company LLC, a
 private residence club management company that operates Fairmont Heritage
 Place, a vacation ownership business.
 
     About Kingdom Hotels International
     Kingdom is owned by a trust for the benefit of HRH Prince Alwaleed bin
 Talal bin Addulaziz Alsaud and his family. HRH Prince Alwaleed and related
 trusts and other entities have made substantial investments in multiple
 sectors including banking, hotels, media, telecommunications, technology,
 construction and real estate, entertainment, and upscale fashion, among
 numerous others. Significant hotel-related investments include interests in
 Fairmont Hotels & Resorts, Four Seasons Hotels and Resorts, the George V Hotel
 and Movenpick Hotels & Resorts, covering more than 260 hotels throughout the
 U.S., the Middle East and Africa. Significant investments in other sectors
 include interests in Citigroup, News Corp., Time Warner, Motorola, Apple
 Computers, Ballast Nedam, Canary Wharf, Disneyland Paris, Saks Inc. and
 Kingdom Center.
 
     About Colony Capital
     Founded in 1991 by Chairman and Chief Executive Officer Thomas J. Barrack
 Jr., Colony is a private, international investment firm focusing primarily on
 real estate-related assets and operating companies. At the completion of this
 transaction, Colony will have invested more than $20 billion in over 8,000
 assets through various corporate, portfolio and complex property transactions.
 The firm owns Raffles Hotels & Resorts, the legendary Costa Smeralda resort in
 Sardinia, Italy and Hotel Guanahani in St. Barts. Colony's other investments
 in exclusive leisure lifestyle and resort properties have included the
 Amanresorts hotel chain, London's Savoy Group, the Orchid at Mauna Lani on
 Hawaii's Big Island, The Stanhope Hotel in New York City, the "W" in Honolulu,
 the Mayfair in Miami, Resorts International in Atlantic City, Atlantic City
 Hilton, Las Vegas Hilton, Accor Casinos in Europe, and the Sunrise Colony
 Country Club communities. Colony has a staff of more than 110 and is
 headquartered in Los Angeles, with offices in Beirut, Boston, Hawaii, Hong
 Kong, London, Madrid, New York, Paris, Rome, Seoul, Shanghai, Singapore,
 Taipei, and Tokyo.
 
     About Raffles Hotels & Resorts
     Raffles is a collection of 33 luxury hotels, including 23 Swissotels,
 located in major cities around the globe that distinguishes itself through the
 highest standards of products and services. Each hotel is a landmark in its
 respective city and most are positioned at the top of their local markets. The
 collection of legendary hotels includes Raffles Hotel and Raffles The Plaza in
 Singapore, Raffles Grand Hotel d'Angkor, Siem Reap, Cambodia, Raffles Hotel Le
 Royal, Phnom Penh, Cambodia, Raffles L'Ermitage Beverly Hills in the US,
 Raffles Resort Canouan Island, The Grenadines, Raffles Hotel Vier
 Jahreszeiten, Hamburg, Germany and Raffles Le Montreux Palace, Montreux,
 Switzerland. Raffles will open the new Raffles properties in Beijing in
 mid-2006 and and Dubai in 2007. (www.raffles.com)
 
 

SOURCE Fairmont Hotels & Resorts Inc.
    TORONTO, Jan. 30 /PRNewswire-FirstCall/ - Fairmont Hotels & Resorts Inc.
 ("Fairmont" or the "Company") (TSX/NYSE:   FHR) today announced that it has
 entered into an Acquisition Agreement whereby a Canadian company owned by
 Kingdom Hotels International ("Kingdom") and Colony Capital ("Colony") will
 acquire all of Fairmont's outstanding common shares at a price of US$45.00 per
 share in cash. The total value of this transaction, including debt and the
 combination with Raffles, is expected to be approximately US$5.5 billion (or
 US$3.9 billion, without giving effect to the Raffles combination).
     This all-cash transaction for 100% of the Company's shares represents a
 28% premium over Fairmont's closing share price on November 4, 2005, the last
 trading day on the NYSE prior to the public expressions of interest in the
 Company, and exceeds the highest trading price of the shares.
     The transaction has been unanimously approved by Fairmont's Board of
 Directors following receipt of the recommendation of a Special Committee of
 the Board. Fairmont's Board has agreed to recommend to its shareholders that
 they vote in favor of the transaction. The Board confirmed its previous
 recommendation of December 21, 2005 to reject the Icahn bid and not to tender
 to the Icahn bid.
     Fairmont has been advised by Kingdom and Colony of their intention to
 combine the Fairmont and Raffles portfolios following the completion of the
 transaction, transforming the companies into a luxury global hotel leader with
 120 hotels in 24 countries. Fairmont will remain an independent hotel
 management and ownership company headquartered in Canada and Raffles, based in
 Singapore, will also retain its independent brand identity. Raffles owns and
 manages a portfolio of 33 properties located primarily across Asia and Europe,
 including its flagship property built in 1887, the Raffles Hotel, Singapore.
     "This transaction is the ideal means of delivering significant, immediate
 value to the Company's current shareholders while preserving this Canadian-
 based company and establishing a solid platform from which to grow," stated
 Peter C. Godsoe, Chairman of Fairmont's Board of Directors. "As previously
 announced, the Fairmont Board created a Special Committee to review options
 for maximizing value for our shareholders. This review was thorough and
 dynamic, and it attracted significant interest from a number of parties.
 Following the presentation of the results of this review by the Special
 Committee, and the Special Committee's recommendation, the Fairmont Board has
 unanimously recommended the transaction with Kingdom and Colony."
     "We are very excited about this transaction as it delivers value to our
 shareholders and creates an expanded foundation from which to build on our
 legacy, grow our brand and create significant opportunities for our employees.
 With an expanding international portfolio of exceptional resorts and gateway
 city properties, our guests will be exposed to new, exciting destinations with
 different cultures," said William R. Fatt, Fairmont's Chief Executive Officer.
 "We look forward to working with our partners who are committed to building on
 the success of our Company."
     HRH Prince Alwaleed bin Talal bin Abdulaziz Alsaud of Kingdom said, "As
 one of Fairmont's current shareholders and strategic partners, Kingdom has
 long recognized the Company's existing value and potential. Fairmont's success
 is clearly attributable to the dedication and professionalism of its
 management and employees. 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." Kingdom and its affiliates own
 3,875,000 common shares of Fairmont.
     "Colony's mission is to make major investments with world class partners
 in irreplaceable assets managed by proven management teams. Our partnership
 with HRH Prince Alwaleed and our investments in Fairmont and Raffles fulfill
 our mission," commented Thomas J. Barrack, Jr., Chairman and Chief Executive
 Officer of Colony. "Fairmont and Raffles are an excellent strategic fit with
 rich histories, global brand recognition and complementary destinations.
 Joining the two luxury companies creates an ideal platform for continued
 international expansion."
     The transaction is to be carried out by way of a statutory plan of
 arrangement and, accordingly, will be subject to the approval of 66 2/3% of
 the votes cast by Fairmont's shareholders at a meeting of shareholders,
 currently anticipated to take place in April, as well as court approval. A
 proxy circular will be prepared and mailed to shareholders in March providing
 shareholders with important information about the transaction. Once mailed,
 the proxy circular will be available at the Canadian SEDAR website at
 www.sedar.com and at the SEC's website at www.sec.gov. All shareholders are
 urged to read the proxy circular once it is available.
     The closing is subject to certain other customary conditions, including
 regulatory approvals. The closing of the transaction is not subject to any
 financing condition. The proposed transaction is expected to close in the
 second quarter of 2006, shortly after receipt of shareholder and court
 approvals.
     UBS Investment Bank, Avington International and Scotia Capital Inc. acted
 as financial advisors to Fairmont. J.P. Morgan Securities Inc. acted as
 financial advisor to Kingdom and Colony.
 
     This news release contains certain forward-looking statements relating,
 but not limited to, Fairmont's operations, anticipated financial performance,
 business prospects and strategies. Forward-looking information typically
 contains statements with words such as "anticipate", "believe", "expect",
 "plan", "estimate", "guidance", "aim" or similar words suggesting future
 outcomes. Such forward-looking statements are subject to risks, uncertainties
 and other factors, which could cause actual results to differ materially from
 future results expressed, projected or implied by such forward-looking
 statements. Such factors include, but are not limited to, economic,
 competitive and lodging industry conditions. These risks are further described
 in Fairmont's filings with Canadian securities regulatory authorities
 (www.sedar.com) and with the U.S. Securities and Exchange Commission website
 (www.sec.gov). All forward-looking statements in this news release are
 qualified by these cautionary statements. These statements are made as of the
 date of this news release and except as required by applicable law, Fairmont
 disclaims any responsibility to update any such forward-looking statements,
 whether as a result of new information, future events or otherwise.
 
     About Fairmont Hotels & Resorts Inc.
     FHR is a leading owner/operator of luxury hotels and resorts. FHR's
 managed portfolio consists of 87 luxury and first-class properties with
 approximately 34,000 guestrooms in the United States, Canada, Mexico, Bermuda,
 Barbados, United Kingdom, Monaco, Kenya and the United Arab Emirates as well
 as two vacation ownership properties managed by Fairmont Heritage Place. FHR
 owns Fairmont Hotels Inc., North America's largest luxury hotel management
 company, as measured by rooms under management, with 49 distinctive city
 center and resort hotels including The Fairmont San Francisco, The Fairmont
 Banff Springs and The Fairmont Scottsdale Princess. FHR also owns Delta
 Hotels, Canada's largest first-class hotel management company, which manages
 and franchises 38 city center and resort properties in Canada. In addition to
 hotel management, FHR holds real estate interests in 21 properties and an
 approximate 24% investment interest in Legacy Hotels Real Estate Investment
 Trust, which owns 24 properties. FHR owns FHP Management Company LLC, a
 private residence club management company that operates Fairmont Heritage
 Place, a vacation ownership business.
 
     About Kingdom Hotels International
     Kingdom is owned by a trust for the benefit of HRH Prince Alwaleed bin
 Talal bin Addulaziz Alsaud and his family. HRH Prince Alwaleed and related
 trusts and other entities have made substantial investments in multiple
 sectors including banking, hotels, media, telecommunications, technology,
 construction and real estate, entertainment, and upscale fashion, among
 numerous others. Significant hotel-related investments include interests in
 Fairmont Hotels & Resorts, Four Seasons Hotels and Resorts, the George V Hotel
 and Movenpick Hotels & Resorts, covering more than 260 hotels throughout the
 U.S., the Middle East and Africa. Significant investments in other sectors
 include interests in Citigroup, News Corp., Time Warner, Motorola, Apple
 Computers, Ballast Nedam, Canary Wharf, Disneyland Paris, Saks Inc. and
 Kingdom Center.
 
     About Colony Capital
     Founded in 1991 by Chairman and Chief Executive Officer Thomas J. Barrack
 Jr., Colony is a private, international investment firm focusing primarily on
 real estate-related assets and operating companies. At the completion of this
 transaction, Colony will have invested more than $20 billion in over 8,000
 assets through various corporate, portfolio and complex property transactions.
 The firm owns Raffles Hotels & Resorts, the legendary Costa Smeralda resort in
 Sardinia, Italy and Hotel Guanahani in St. Barts. Colony's other investments
 in exclusive leisure lifestyle and resort properties have included the
 Amanresorts hotel chain, London's Savoy Group, the Orchid at Mauna Lani on
 Hawaii's Big Island, The Stanhope Hotel in New York City, the "W" in Honolulu,
 the Mayfair in Miami, Resorts International in Atlantic City, Atlantic City
 Hilton, Las Vegas Hilton, Accor Casinos in Europe, and the Sunrise Colony
 Country Club communities. Colony has a staff of more than 110 and is
 headquartered in Los Angeles, with offices in Beirut, Boston, Hawaii, Hong
 Kong, London, Madrid, New York, Paris, Rome, Seoul, Shanghai, Singapore,
 Taipei, and Tokyo.
 
     About Raffles Hotels & Resorts
     Raffles is a collection of 33 luxury hotels, including 23 Swissotels,
 located in major cities around the globe that distinguishes itself through the
 highest standards of products and services. Each hotel is a landmark in its
 respective city and most are positioned at the top of their local markets. The
 collection of legendary hotels includes Raffles Hotel and Raffles The Plaza in
 Singapore, Raffles Grand Hotel d'Angkor, Siem Reap, Cambodia, Raffles Hotel Le
 Royal, Phnom Penh, Cambodia, Raffles L'Ermitage Beverly Hills in the US,
 Raffles Resort Canouan Island, The Grenadines, Raffles Hotel Vier
 Jahreszeiten, Hamburg, Germany and Raffles Le Montreux Palace, Montreux,
 Switzerland. Raffles will open the new Raffles properties in Beijing in
 mid-2006 and and Dubai in 2007. (www.raffles.com)
 
 SOURCE  Fairmont Hotels & Resorts Inc.