BAHAMAS-Casino and resort operator Kerzner International has announced a management buy-out of $3.2 billion, 6% above its previous offer.

The buy-out group, led by Kerzner chairman Sol Kerzner and chief executive Butch Kerzner, raised an earlier offer. Bahamas-based Kerzner, which owns brands such as Atlantis resorts and One&Only hotels, said as a result of the raised offer it would no longer seek higher offers. The higher offer by management follows the refusal of one large investor to support an earlier offer. Ronald Baron, who controls 15.8% of Kerzner through various entities, suggested the investor group raise its offer to $80 a share.

The total deal, including the $599 million of net debt, is about $3.8 billion and carries a break-up fee of 3% of the equity value of the deal, or about $95 million.

The buy-out consortium includes United Arab Emirates-based Istithmar PJSC, Whitehall Street Global Real Estate, Goldman Sachs, Colony Capital LLC, Providence Equity Partners, Inc. and the Related Cos., L.P.

Kerzner’s board of directors has approved the agreement, which is expected to close in the middle of 2006, a company statement said. Kerzner will become a privately held company after the transaction closes.

Kerzner is currently expanding its flagship Atlantis, Paradise Island resort in the Bahamas as well as developments in Dubai and Morocco. It is also one of the bidders for a casino license in Singapore.

This is the second time Kerzner shareholders have tried to take the company private.

In 2000, a group of investors in the company that was then called Sun International Hotels Ltd. offered to buy shares they did not already own. However, the deal fell through and led to a restructuring of its ownership structure and renaming to Kerzner International.

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