Carnival to Buy Time-Share Firm Fairfield

Carnival Corp., the world’s largest cruise operator, agreed to buy Fairfield Communities Inc. for $775 million in stock and assumed debt to enter the time-share resort business. Miami-based Carnival will swap 0.3164 of its shares for each of share of Orlando, Fla.-based Fairfield, valuing Fairfield at $15.61 a share, 20% more than Friday’s closing price. Carnival also will assume $50 million of debt. On the NYSE, Carnival shares fell $3.50 to close at $43.13, and Fairfield fell $1.31 to close at $11.69. The companies said Carnival can market its cruises to Fairfield’s customers, and that Fairfield can market its resorts to Carnival’s customers. Carnival expects the purchase would add about 5 cents a share to its annual earnings once it is completed. Fairfield, with about 5,400 employees, serves more than 278,000 households and has 28 resorts in the U.S. and the Bahamas. It also has six properties being developed in Florida, Las Vegas, Arizona and Virginia.