David and Goliath battle for Hamilton Island

by Susan Boyd on 23 Apr 2003 A $176 million management buy-out bid for Hamilton Island has been accepted by Hamilton Island’s Board of Directors to buy the Whitsunday island paradise.

The Board today entered into a Preliminary Agreement with 21st Century Resorts Holdings Pty Limited under which 21st Century Resorts would acquire full ownership of Hamilton Island via a Scheme of Arrangement.

The Scheme will offer shareholders a cash payment of $2.70 per share.

Hamilton Island Chairman Michael Butler said that the cash nature of the $2.70 offer provides shareholders with a straightforward, fixed price offer for their holding of Hamilton Island.

The offer is expected to be presented to shareholders at a meeting on July 17.

21st Century Resorts is a company established by Hamilton Island’s senior management, led by Managing Director and CEO Wayne Kirkpatrick and CFO and Company Secretary Gavin Herholdt.

Shareholders in 21st Century Resorts are the island’s senior management team, Thakral Holdings Limited (a property group listed on the Australian Stock Exchange with a market capitalisation of $381 million and assets valued at $758 million as at June 2002) and a group of investors arranged by Grant Samuel Corporate Finance Pty Ltd including Grant Samuel Property Fund 3 (a fund managed by the Grant Samuel Group).

Thakral will hold 42.5 percent of the equity in 21st Century Resorts with an investment of $31.25 million. ANZ will provide $110 credit facilities to the 21st Century Resorts Group.

Hamilton Island Managing Director and CEO Wayne Kirkpatrick said he is pleased to reach this position.

“Despite the challenging times in which we live, Hamilton Island has proven to be a robust and resilient business and we are confident of the future prospects for the company,” said Mr Kirkpatrick.

Mr Kirkpatrick said 21st Century Resort’s offer of $2.70 is at a significant premium to Hamilton Island’s current and recent share price and being a straightforward fixed price cash offer, it is attractive to shareholders.