|SAN FRANCISCO - April 19, 1999--Fairmont Hotel Management
L.P. announced today that the company has entered into an agreement in
principle with Canadian Pacific Limited (Canadian Pacific), and its wholly-owned
subsidiary, Canadian Pacific Hotels Resorts Inc. (CPH), to create a new
management company to be called Fairmont Hotels Resorts Inc. (Fairmont).
The transaction will combine the management of two prestigious hotel
groups and create a collection of luxury hotels across North America, Mexico
and the Caribbean. The seven landmark Fairmont Hotels, which are located
in US gateway cities and include such famous
"We have agreed, in principle, to a business combination with Canadian Pacific that not only expands our portfolio of luxury properties nearly five fold, but also puts Fairmont into the resort category," said Lewis Wolff, Chairman of Fairmont Hotels and Co-founder and Chairman of Maritz, Wolff Co. "And all this is only the beginning of the Fairmont brand's expansion."
"We welcome the enormous opportunities that this venture with Canadian Pacific presents," said Edward E. Mace, President and Chief Executive Officer of Fairmont Hotel Management L.P. "This is a win-win for everyone - our guests, employees, and property owners. Our guests will enjoy a much broader selection of Fairmont luxury hotels and resorts to choose from, while our employees and property owners will benefit from being part of a larger hospitality operation."
According to Bill Fatt, Chairman and Chief Executive Officer of Canadian
Pacific Hotels, the Fairmont properties provide an excellent fit with the
company's existing portfolio. "We are proud to link icon hotels like The
Plaza in New York with our own historic properties
CPH will hold a 67% interest in Fairmont, while Kingdom Hotels (USA) Ltd. and Maritz Wolff Co. will each have a 16.5% interest. The owners of Fairmont L.P. will contribute the management contracts of their properties and the Fairmont brand name, and CPH will contribute the management contracts of 28 hotels. Real estate ownership of the properties will not change.
"This is wonderful news for the Fairmont brand," said HRH Prince Alwaleed bin Talal bin Abdulaziz Alsaud, Chairman of Kingdom Hotels (USA) Ltd. "The international nature of this agreement allows us to draw customers from across North America and results in a world class collection of resorts and city hotels in five countries - a marvelous step forward for Fairmont!"
As a result of this transaction, key executives from both entities will
assume new titles and roles. William R. Fatt, Chairman and CEO of CPH will
assume the same positions at Fairmont Hotels Resorts. Chris J. Cahill,
current President and COO of CPH will serve as President and COO of Fairmont
Hotels Resorts, reporting to Mr. Fatt, and will have direct responsibility
for Canada and the Caribbean. Edward E. Mace will continue in his current
role as President of Fairmont Hotels Resorts in the United States
and additionally Mexico and will also report to Mr. Fatt. Fairmont Hotels
Resorts' corporate headquarters will be based in Toronto, while the
Mr. Mace points out that, much like Fairmont, CPH has been pursuing strategic growth opportunities for the past year. In the second quarter of 1998 CPH strengthened its Canadian presence with the purchase of Delta Hotels Resorts (Delta), a full service, first class hotel management company, which doubled its hotels under management and provided a platform for growth in a new market segment. In August 1998 CPH purchased the seven warm weather resort properties of Princess Hotels, expanding its network beyond Canada to the US, Mexico, Bermuda and the Caribbean.
Fairmont had revenues of $420 million 1998. The Fairmont Hotels, with
4,263 rooms and 4,500 employees, are located in Boston, Chicago, Dallas,
New Orleans, New York, San Francisco and San Jose. Fairmont's current partners
are a Maritz Wolff fund and Kingdom Hotels (USA).
Based in Toronto, CPH is Canada's largest owner-operator of full-service hotels, with 1998 revenues of $690 million. CPH has approximately 25,000 rooms at 65 hotels and 21,500 employees across Canada, the United States, Mexico, Bermuda, Barbados and Asia.
Fairmont currently operates seven luxury hotels in Boston, Chicago, Dallas, New Orleans, The Plaza Hotel in New York, San Francisco and San Jose/Silicon Valley. More information about Fairmont can be found at www.fairmont.com.
|Also See:||Edward Mace Appointed President and CEO of Fairmont Hotels / June 1998|
|Maritz, Wolff Co. Reaches Agreement to Acquire 50% Stake in Fairmont Hotels / March 1998|