Fairmont Hotels & Resorts has entered into an acquisition agreement whereby Kingdom Hotels International and Colony Capital - owner of Raffles Hotels - 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."