Fairmont Board Unanimously Rejects Icahn's Partial Take-Over Offer At US$40 Per Share

Dec 22, 2005, 00:00 ET from Fairmont Hotels & Resorts Inc.

    TORONTO, Dec. 22 /PRNewswire-FirstCall/ - Fairmont Hotels & Resorts Inc.
 ("Fairmont" or the "Company") (TSX/NYSE:   FHR) today announced that its Board
 of Directors has concluded that Icahn Partners LP and Icahn Partners Master
 Fund LP's partial take-over bid for approximately 41% of Fairmont's
 outstanding shares at US$40 per share (the "Icahn Offer") is inadequate and
 not in the best interests of Fairmont or its shareholders. Accordingly, the
 Board is recommending that shareholders reject the Icahn Offer and not tender
 any of their shares.
     Peter C. Godsoe, Chairman of Fairmont's Board of Directors, stated, "A
 Special Committee of independent directors carefully and thoroughly evaluated
 the Icahn Offer. Following the recommendation of the Special Committee, the
 Fairmont Board unanimously concluded that this offer is inadequate, not in the
 best interests of our shareholders and should be rejected."
     "We firmly believe that the Fairmont Board of Directors - rather than
 Mr. Icahn - is best qualified to make decisions about the future of Fairmont
 and what action will ultimately prove to be in the best interest of the
 Company and its shareholders. The Special Committee is actively exploring
 alternatives to the Icahn Offer, which may include a possible transaction with
 one or more third parties. We will provide further recommendations to the full
 Board in due course," added Mr. Godsoe.
     William R. Fatt, Fairmont's Chief Executive Officer, commented, "Fairmont
 has a world-class collection of luxury assets, which represents some of the
 most attractive hotels in the global lodging industry. We also have
 significant undeveloped land holdings and a 23.7% ownership interest in Legacy
 Hotels Real Estate Investment Trust, Canada's largest luxury lodging REIT. In
 addition, our growing brand recognition is attracting both travelers and
 business partners. Mr. Icahn's partial take-over bid, for the reasons
 discussed in the Directors' Circular, is not in the best interests of Fairmont
 and its shareholders, and should be rejected."
     In making its recommendation to reject the offer to its shareholders, the
 Fairmont Board of Directors received written opinions from each of UBS
 Securities LLC, Avington International and Scotia Capital Inc. that, as of the
 date of such opinions, the Icahn Offer is inadequate from a financial point of
 view to Fairmont shareholders (other than the offerors and their related
 parties). The Board cited a number of additional factors, including, among
 others:
 
         -  The Icahn Offer seeks to provide Icahn with control without
            offering, in the judgment of the Special Committee and the Board,
            an appropriate change of control premium for the shares purchased
            or any premium for the shares not purchased;
 
         -  There are risks associated with Icahn's lack of experience in
            operating a company such as Fairmont;
 
         -  The Icahn Offer fails to comply with shareholder approved
            permitted bid requirements;
 
         -  The Icahn Offer is highly conditional; and
 
         -  There are other offers or alternatives to the Icahn Offer that may
            emerge that could potentially provide shareholders with greater
            value.
 
     "Above all, Fairmont's assets present opportunities for value enhancement
 and growth," Mr. Fatt said. "Our plan has been to acquire, stabilize and
 monetize assets and deliver value back to all shareholders through share
 repurchases and dividends. Fairmont's Board, through the Special Committee, is
 exploring alternatives to the Icahn Offer and will act in the best interest of
 Fairmont and its shareholders."
     A copy of the Directors' Circular, which sets forth in greater detail the
 Board's recommendation and the reasons therefor, is being mailed to all
 shareholders. Fairmont's shareholders are strongly advised to read the
 Directors' Circular because it contains important information. Shareholders
 may also obtain a copy of the Directors' Circular from the Company's investor
 website at www.fairmontinvestor.com. Copies will also be available at the
 Canadian SEDAR website at www.sedar.com and at the SEC's website at
 www.sec.gov. The Directors' Circular is being included as an exhibit to
 Fairmont's Solicitation/Recommendation Statement on Schedule 14D-9, which has
 been filed with the SEC.
     UBS Securities LLC, Avington International and Scotia Capital Inc. all
 acted as financial advisors to Fairmont. As well, McCarthy Tetrault LLP and
 Skadden, Arps, Slate, Meagher & Flom LLP have been engaged as the Company's
 legal advisors. Fasken Martineau DuMoulin LLP has been retained to provide
 legal advice to the Special Committee.
 
     About Fairmont Hotels & Resorts Inc.
     FHR is a leading owner/operator of luxury hotels and resorts. FHR's
 managed portfolio consists of 88 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 50 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 27 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.
 
     This news release contains certain forward-looking statements relating,
 but not limited to, FHR'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 FHR'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, FHR disclaims any
 responsibility to update any such forward-looking statements, whether as a
 result of new information, future events or otherwise.
 
 
 

SOURCE Fairmont Hotels & Resorts Inc.
    TORONTO, Dec. 22 /PRNewswire-FirstCall/ - Fairmont Hotels & Resorts Inc.
 ("Fairmont" or the "Company") (TSX/NYSE:   FHR) today announced that its Board
 of Directors has concluded that Icahn Partners LP and Icahn Partners Master
 Fund LP's partial take-over bid for approximately 41% of Fairmont's
 outstanding shares at US$40 per share (the "Icahn Offer") is inadequate and
 not in the best interests of Fairmont or its shareholders. Accordingly, the
 Board is recommending that shareholders reject the Icahn Offer and not tender
 any of their shares.
     Peter C. Godsoe, Chairman of Fairmont's Board of Directors, stated, "A
 Special Committee of independent directors carefully and thoroughly evaluated
 the Icahn Offer. Following the recommendation of the Special Committee, the
 Fairmont Board unanimously concluded that this offer is inadequate, not in the
 best interests of our shareholders and should be rejected."
     "We firmly believe that the Fairmont Board of Directors - rather than
 Mr. Icahn - is best qualified to make decisions about the future of Fairmont
 and what action will ultimately prove to be in the best interest of the
 Company and its shareholders. The Special Committee is actively exploring
 alternatives to the Icahn Offer, which may include a possible transaction with
 one or more third parties. We will provide further recommendations to the full
 Board in due course," added Mr. Godsoe.
     William R. Fatt, Fairmont's Chief Executive Officer, commented, "Fairmont
 has a world-class collection of luxury assets, which represents some of the
 most attractive hotels in the global lodging industry. We also have
 significant undeveloped land holdings and a 23.7% ownership interest in Legacy
 Hotels Real Estate Investment Trust, Canada's largest luxury lodging REIT. In
 addition, our growing brand recognition is attracting both travelers and
 business partners. Mr. Icahn's partial take-over bid, for the reasons
 discussed in the Directors' Circular, is not in the best interests of Fairmont
 and its shareholders, and should be rejected."
     In making its recommendation to reject the offer to its shareholders, the
 Fairmont Board of Directors received written opinions from each of UBS
 Securities LLC, Avington International and Scotia Capital Inc. that, as of the
 date of such opinions, the Icahn Offer is inadequate from a financial point of
 view to Fairmont shareholders (other than the offerors and their related
 parties). The Board cited a number of additional factors, including, among
 others:
 
         -  The Icahn Offer seeks to provide Icahn with control without
            offering, in the judgment of the Special Committee and the Board,
            an appropriate change of control premium for the shares purchased
            or any premium for the shares not purchased;
 
         -  There are risks associated with Icahn's lack of experience in
            operating a company such as Fairmont;
 
         -  The Icahn Offer fails to comply with shareholder approved
            permitted bid requirements;
 
         -  The Icahn Offer is highly conditional; and
 
         -  There are other offers or alternatives to the Icahn Offer that may
            emerge that could potentially provide shareholders with greater
            value.
 
     "Above all, Fairmont's assets present opportunities for value enhancement
 and growth," Mr. Fatt said. "Our plan has been to acquire, stabilize and
 monetize assets and deliver value back to all shareholders through share
 repurchases and dividends. Fairmont's Board, through the Special Committee, is
 exploring alternatives to the Icahn Offer and will act in the best interest of
 Fairmont and its shareholders."
     A copy of the Directors' Circular, which sets forth in greater detail the
 Board's recommendation and the reasons therefor, is being mailed to all
 shareholders. Fairmont's shareholders are strongly advised to read the
 Directors' Circular because it contains important information. Shareholders
 may also obtain a copy of the Directors' Circular from the Company's investor
 website at www.fairmontinvestor.com. Copies will also be available at the
 Canadian SEDAR website at www.sedar.com and at the SEC's website at
 www.sec.gov. The Directors' Circular is being included as an exhibit to
 Fairmont's Solicitation/Recommendation Statement on Schedule 14D-9, which has
 been filed with the SEC.
     UBS Securities LLC, Avington International and Scotia Capital Inc. all
 acted as financial advisors to Fairmont. As well, McCarthy Tetrault LLP and
 Skadden, Arps, Slate, Meagher & Flom LLP have been engaged as the Company's
 legal advisors. Fasken Martineau DuMoulin LLP has been retained to provide
 legal advice to the Special Committee.
 
     About Fairmont Hotels & Resorts Inc.
     FHR is a leading owner/operator of luxury hotels and resorts. FHR's
 managed portfolio consists of 88 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 50 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 27 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.
 
     This news release contains certain forward-looking statements relating,
 but not limited to, FHR'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 FHR'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, FHR disclaims any
 responsibility to update any such forward-looking statements, whether as a
 result of new information, future events or otherwise.
 
 
 SOURCE  Fairmont Hotels & Resorts Inc.