FOR IMMEDIATE RELEASE
CARNIVAL CORPORATION TO ACQUIRE FAIRFIELD COMMUNITIES
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IN $775 MILLION TRANSACTION
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Fairfield is one of the Largest and Most Successful
Vacation Ownership Companies
Transaction is an Extension of Carnival as One of the
Leading Vacation Companies in the World
Provides Carnival with Access to Fairfield's Large Pool of Seasoned
Travelers
Provides Fairfield With Expanded Sales and Marketing Opportunities
MIAMI (01/24/00) -- Carnival Corporation, the world's largest cruise
vacation company (NYSE: CCL), and Fairfield Communities, Inc (NYSE: FFD),
one of America's largest vacation ownership companies, today announced they
have entered into a letter of intent whereby Carnival will acquire Fairfield
in a strategic merger. Under the proposed transaction, Fairfield would
become a wholly owned subsidiary of Carnival.
The transaction is to be structured as a tax-free reorganization in
which stockholders of Fairfield will receive .3164 share of Carnival common
stock for each Fairfield common share owned. Based on Carnival's closing
price during the last 10 trading days, the exchange ratio implies a per
share price of $15.61 for each Fairfield share, representing a premium of
54% over the average closing price of Fairfield's common stock during the
same period. This values Fairfield's equity at $725 million. Including
assumption of $50 million of Fairfield debt, the total value of the
transaction is $775 million.
Both parties intend that the transaction will be treated as a pooling-
of-interest for accounting purposes. The transaction is expected to be
accretive to Carnival's earnings per share in 2000. Fairfield serves more
than 278,000 vacation-owning households, which totals approximately 640,000
individuals, and has 28 resorts throughout North America with six resorts
under development. Fairfield has been successfully selling Carnival brand
cruises through its innovative points-based vacation program (FairShare
Plus(R)) since 1996 and is the largest purchaser of Carnival cruises among
vacation ownership companies. Fairfield operates one of the largest points-
based vacation systems in the world. Through this highly flexible system,
owners are able to use their points for vacation experiences throughout the
world. The fastest growing exchange request within the FairShare Plus(R)
system is for cruises.
According to Xxxxx Xxxxxx, Carnival's chairman and CEO, the transaction
would give Carnival access to a large pool of seasoned travelers, many of
whom are experienced cruisers. Approximately 72% of Fairfield's customers
have expressed an interest in cruising and 52% of Fairfield's customers have
taken a cruise. Xxxxxx pointed out that the vacation ownership concept does
more than provide "customers for life," in fact, it lasts beyond that, as
the interests are passed down and remain in families.
"I believe this will be a very synergistic combination of two large
leisure and vacation companies serving the best interest of the stockholders
of both Carnival and Fairfield," Xxxxxx said. "The wide-ranging
opportunities presented by this transaction should allow us to capitalize on
the tremendous brand, marketing and sales channels that exist between the
two companies," he added. Xxxxxx noted that he looks forward to working
with Xxxxxxxxx's strong management team.
Xxx Xxxx, president and CEO of Fairfield, said that the transaction
allows the company to align itself with the world's largest cruise company
and leverage Carnival's global brand awareness, financial strength and
reputation for high quality, value-oriented vacation products. He also
indicated he believes this will enable Fairfield to accelerate the expansion
of its business. "We believe the vacation ownership companies that will
enjoy the greatest success in the future will do so as part of a large,
well-branded company as we are now seeing with Marriott, Four Seasons and
Disney," he said. "Fairfield stockholders should be enthusiastic about this
transaction, as Carnival not only possesses tremendous brand recognition
with consumers but also is one of the world's fastest growing and most
dynamic vacation companies," he added.
Xxxx pointed out that Carnival's stature as a worldwide vacation leader
was validated in a 1999 Business Week magazine performance survey of S&P 500
companies in which Carnival ranked 33rd and was the only company in the
"leisure time industry" category to make the top 50.
Carnival has been seeking an acquisition in the vacation industry with
the potential to achieve high returns and opportunities for significant
growth. "This transaction is in line with that strategy, as both Carnival
and Fairfield are characterized by aggressive strategic expansion, strong
margins and leadership positions within their respective segments of the
leisure travel industry. In addition, our guests share extremely similar
demographic attributes," Xxxxxx said.
Completion of the transaction is conditioned upon the receipt of all
corporate, stockholder, regulatory and government approvals and other
customary conditions, including completion of satisfactory due diligence and
definitive documentation. No assurance can be given that the foregoing
conditions will be satisfied or that the transaction will be finalized.
Fairfield's stockholders should carefully review the proxy and
registration statements when they are filed with the Securities and Exchange
Commission with respect to the proposed transaction before making any
decisions concerning the proposed transaction.
Carnival Corporation is comprised of Carnival Cruise Lines, the world's
largest cruise line based on passengers carried, Holland America Line,
Windstar Cruises, Cunard Line Limited, which operates the Cunard and
Seabourn cruise brands, and interests in Costa Cruises and Airtours plc.
Combined, Carnival Corporation's various brands operate 45 ships in the
Caribbean, Alaska, Europe and other worldwide destinations.
Fairfield is one of the largest vacation ownership companies in North
America. The company markets vacation products and manages resort
properties that provide quality vacation experiences at 28 locations in 11
states and the Bahamas, to more than 278,000 vacation-owning households.
Fairfield currently has six new properties under development.
Carnival Corporation has scheduled an analyst call for 11 a.m. (EST)
today to discuss the proposed transaction. Interested parties who would
like to listen to the call may do so via a simulcast on the company's Web
site at xxx.xxxxxxxxxxxx.xxx.
###
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NOTE: Statements in this press release relating to matters that are not
historical facts are forward-looking statements. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors,
which may cause the actual results, performances or achievements of Carnival
and Fairfield to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Such factors include general economic and business conditions,
changes in cruise industry capacity and competition, interest rate trends,
availability of real estate properties, changes in tax and other laws and
regulations affecting Carnival and Fairfield and other factors, which are
described in further detail in the companies' filings with the Securities
and Exchange Commission.
CONTACTS:
For Carnival Corporation:
Xxx Xxxxxxxxx - (000) 000-0000, ext. 16000
For Fairfield Communities:
Xxx Xxxx - (000) 000-0000
Xxxxxx Xxxxx Associates
(000) 000-0000
Xxxxxxx Xxxx/Xxx Xxxxxx
Press: Xxxxxx Xxxx
NOTE TO EDITORS: A Fairfield fact sheet is attached.
FAIRFIELD COMMUNITIES, INC.
FACT SHEET
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GENERAL COMPANY DESCRIPTION
---------------------------
Fairfield Communities, Inc. is one of the largest vacation ownership
companies in the United States. The Company markets vacation products and
manages resort properties, providing quality vacation experiences at 28
locations in 11 states and the Bahamas to over 250,000 Fairfield owners.
The common stock trades on the New York Stock Exchange under the symbol
"FFD."
OWNERS (as of 12/31/99)
-----------------------
FairShare Plus 106,054
Fixed week 102,205
Discovery 28,463
Lot 38,212
Select Vacation Club 3,491
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Total Owners: 278,425
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FAIRFIELD RESORTS AND SALES CENTERS
-----------------------------------
Vacation Ownership Resorts: 28 resorts in 11 states
Resorts under development: 6
Rental Resorts: 1
Urban Sales Centers: 5
OTHER RESORTS
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Affiliate Resorts - Resorts which have an agreement with Fairfield to
participate in the FairShare Plus program. Accommodations at the resort
through FairShare Plus become available as these enrollments take place.
Associate Resorts - Resorts where Fairfield has acquired accommodations
which are available in the FairShare Plus system for a limited period of
time.
EMPLOYEES (active as of 12/31/99)
---------------------------------
5,404 employees
UNITS
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Approximate number of timeshare units managed and/or developed: 3,200
PROGRAMS
--------
FairShare - Vacation ownership of a fixed week at a fixed location.
The FairShare Exchange (FAX) system offers internal exchanges to
participating Fairfield resorts during three designated seasons.
FairShare Plus - The reservation system that allows members to use
points which are symbolic of their vacation ownership to make reservations
at participating resorts. Members choose the location, season, length of
stay and size of the unit.
Ambassador Referral Program - The program where members can earn
credits when their friends and family members visit a Fairfield sales
location and purchase LeisurePlan.
LeisurePlan - A travel-related benefits program that offers travel,
entertainment and recreational opportunities and discounts.
Discovery Vacations - A short-term membership in the FairShare Plus and
LeisurePlan programs.
VCI (Vacation Clearinghouse International) - The Fairfield program
which provides additional resort rentals and listing service for resort
rentals and resales.
Select Vacation Club - A membership product that offers cash-back
savings on travel-related services.
Vacations-To-Go Hotline - An automated call-in service (0-000-000-0000)
which provides a listing of last-minute vacation accommodations available at
discounted values.
CORPORATE OFFICES
-----------------
8669 Commodity Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
000-000-0000
00000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxxx Xxxx, XX 00000
000-000-0000
0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, XX 00000
