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Raffles Hotel to be sold to US-based investment fund

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Source: www.raffles.com

Raffles Holdings to divest Hotel Business for an enterprise value of S$1.72 billion, a 64% premium to NTA, unlocking significant shareholders¡¯ value

The Board of Raffles Holdings Limited (¡°RHL¡±) today announced that RHL has entered into a definitive agreement to divest its Hotel Business (¡°Transaction¡±) to Colony HR Acquisitions LLC, an affiliate of Colony Capital LLC for an enterprise value of S$1.72 billion, subject to adjustments upon completion.

The key terms of the Transaction are :-

- divestment at implied enterprise value of S$1.72 billion

- aggregate consideration of S$1.45 billion in cash

- gain on divestment of S$605 million

- 64% premium to the Hotel Business¡¯ NTA

- gross proceeds of 69 cents per RHL share

- unlock significant shareholders¡¯ value

- A special dividend of 40 cents per share to RHL¡¯s shareholders from proceeds is proposed (aggregating to approximately S$816 million).

- The Transaction is subject to shareholders¡¯ approval at an Extraordinary General Meeting to be convened. CapitaLand, the 59.7% shareholder of RHL, has given an irrevocable undertaking to vote in favour of the Transaction.

- After completion of the Transaction, RHL continues to hold its 45% direct equity interest in Tincel Properties which owns the Raffles City Complex. Tincel Properties generated a total operating profit of S$96.3 million in FY2004.

STRONGER PLATFORM FOR FURTHER GROWTH
¡°The Hotel Business has made significant progress in delivering growth and strong operating performance since the successful implementation of the strategic repositioning plan in April 2003. With the Transaction, the Hotel Business will complement Colony Capital¡¯s larger global portfolio of hotels which will provide an even stronger platform for further growth and development.
After the Transaction, Raffles Holdings will continue to have strong earnings from its interest in Tincel Properties and a strong balance sheet to fund future growth and development.¡±
Jennie Chua, President & CEO, Raffles Holdings Limited
ANOTHER SUCCESS IN UNLOCKING SIGNIFICANT SHAREHOLDERS¡¯ VALUE
¡°This transaction will create and unlock a very significant amount of value for RHL¡¯s shareholders as evidenced by the large estimated gain on divestment of S$605 million. Furthermore, the substantial aggregate consideration of more than S$1.4 billion ¨C equivalent to 69 cents per share ¨C provides RHL with the ability to not only return a large amount of capital to all its shareholders by the special dividend, but also to retain a substantial amount of capital and gearing capacity for re-investment into higher yielding assets for future business growth.
The CapitaLand Group is committed to achieve the best returns for our shareholders. By focusing on continuous active balance sheet and capital management across all our businesses, the Group¡¯s prime objective is to enhance capital productivity and maximize shareholder returns.
CapitaLand¡¯s consolidated financial results will benefit substantially from this transaction by virtue of its approximately 59.7 percent interest in RHL. The Group intends to re-invest the proceeds into higher growth businesses to increase ROE performance.
The CapitaLand Group, into its fifth year of operations, is committed to maintain its growth momentum going forward for the benefit of our shareholders.¡±
Liew Mun Leong, Deputy Chairman, Raffles Holdings Limited and President & CEO of CapitaLand Group (major shareholder of Raffles Holdings)
More.....

Source: www.raffles.com News Release 18 Jul 2005

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Monday

18 July 2005