Kerzner Agrees to Buy-Out - Wednesday 22nd of March 2006

PARADISE ISLAND, Bahamas Kerzner International Limited (NYSE:KZL), through its subsidiaries a leading international developer and operator of destination resorts, casinos and luxury hotels, and an investor group which is being led by the Company's Chairman, Sol Kerzner and its Chief Executive Officer, Butch Kerzner, today announced that they have entered into a definitive agreement under which the Company will be acquired by the investor group for $76.00 in cash per outstanding ordinary share. The investor group also includes Istithmar PJSC ("Istithmar"), which is a significant shareholder of the Company, Whitehall Street Global Real Estate Limited Partnership 2005, Colony Capital LLC, Providence Equity Partners, Inc. and The Related Companies, L.P., which is affiliated with one of the Company's Directors. The aggregate transaction value, including the assumption of $599 million of net debt as of December 31, 2005, is approximately $3.6 billion.

The Board of Directors of the Company, upon the unanimous recommendation of a Special Committee of Directors formed to evaluate the terms of the transaction, has approved the merger agreement. The Special Committee, which includes representatives of two significant shareholders that are not affiliated with the investor group, negotiated the price and other terms of the merger agreement with the assistance of its financial and legal advisors.

In accordance with the merger agreement, the Company and the Special Committee's advisors, working under the supervision of the Special Committee, will actively solicit superior proposals during the next 45 days. The Kerzners and Istithmar have agreed to cooperate in this solicitation process.

In the event the merger agreement is terminated, in order for the Company to enter into a superior transaction arising during the 45-day solicitation period, the investor group will receive a break-up fee of 1% of the equity value of the transaction (approximately $30 million). In addition, in the event of a superior transaction, Sol and Butch Kerzner have agreed to provide certain transitional services to the acquiring party for a period of six months and, in the event of certain all-cash acquisitions, to vote in favor of the superior transaction. The Company noted that there can be no assurance that the solicitation of superior proposals will result in an alternative transaction. The Company does not intend to disclose developments with respect to the solicitation process unless and until its Board of Directors has made a decision.

"We believe that the acquisition by the investor group represents an excellent opportunity for the Company's shareholders, and in addition, we will be actively soliciting other offers to ensure that value is maximized for all of our shareholders," said Eric Siegel, Chairman of the Special Committee of the Board of Directors.

"We are delighted to be able to move forward with this transaction. The Company remains fully committed to all of its current development and expansion plans as scheduled, including our Phase III expansion on Paradise Island and our joint ventures in Dubai and Morocco. Furthermore, our entire team remains focused on and committed to developing an outstanding proposal in connection with one of the two casino licenses to be issued by the Government of Singapore," said Butch Kerzner, Chief Executive Officer of the Company. "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."

The transaction is expected to close in mid-2006 and is subject to certain terms and conditions customary for transactions of this type, including the receipt of financing and regulatory approvals. Deutsche Bank Securities Inc. and Goldman Sachs Credit Partners have provided commitments to the investor group for the debt portion of the financing for the transaction.

The transaction also requires approval of the merger agreement by the Company's shareholders. The Kerzners and Istithmar, which together own approximately 24% of the Company's ordinary shares, have agreed to vote in favor of the transaction. Upon the completion of the transaction, Sol Kerzner will remain Chairman of the Company and will continue to oversee the development and construction of the Company's projects, and Butch Kerzner will remain Chief Executive Officer. The Company will schedule a special meeting of its shareholders for the purpose of obtaining shareholder approval. Upon completion of the transaction, the Company will become a privately held company and its common stock will no longer be traded on The New York Stock Exchange.

J.P. Morgan Securities Inc. is serving as financial advisor and Cravath, Swaine & Moore LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP are serving as legal advisors to the Special Committee of the Company's Board of Directors. Deutsche Bank AG and Groton Partners LLC are serving as financial advisors and Simpson Thacher & Bartlett LLP is serving as legal advisor to the investor group.

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