Kerzner International ( KZL), the resort and casino operator, agreed to go private in a $3.6 billion leveraged buyout Monday led by CEO Butch Kerzner and his father, Chairman Sol Kerzner. The buyers, which include private equity companies Providence Equity and Colony Capital, will pay $76 cash for each Kerzner share outstanding, and assume about $600 million of debt. Kerzner said the deal should close in mid-2006 pending financing, for which it has commitment letters from Goldman Sachs and Deutsche Bank. Kerzner was the subject of a story on TheStreet.com last week detailing
hedge fund interest in the stock . The shares were halted for trading Monday at $70.19 before the news hit. Recently, they were up $7.82, or 11%, to $78.18. Other members of the buyout group include Kerzner holder Istithmar PJSC; Whitehall Street Global Real Estate L.P. 2005; and the Related Cos. Kerzner's board approved the transaction at the unanimous recommendation of a special panel formed to evaluate it. Under the merger agreement, which carries a $30 million breakup fee, advisers to the panel will spend the next 45 days soliciting superior proposals. CEO Butch Kerzner said: "My father's and my confidence in the business is reflected by the fact that we will increase our ownership interest in the company to about 25% upon the completion of this transaction. Throughout this process, it will remain business as usual for all of our operations and we anticipate that all employees, including the existing management team, will retain their current positions after our transaction closes."