The purchase price for the equity interest is approximately $23 million and will be satisfied by the issuance of one million common shares. In addition, Fairmont will acquire net working capital of about $9 million for cash. Existing secured debt of approximately $66.5 million on the property will remain in place. The transaction is expected to close in the first quarter of 2003, subject to regulatory approvals. Following this transaction, Prince Alwaleed will hold approximately 4.9% of Fairmont's issued and outstanding shares.

Fairmont purchased the initial 50% equity interest in the 379-room hotel in July 2001 and at that time committed to a substantial guestroom renovation and upgrade. The renovation program, which began in November 2002, is expected to be completed by early next year.

"We are pleased to have acquired the remaining real estate interest in such an important property in one of North America's key gateway cities," says William R. Fatt, CEO of Fairmont. "We are committed to the ongoing improvement of the image, quality and performance of this prominent property in the heart of Boston, and expect it to be a strong contributor to our company and our brand."