Sea Island Resort Acquired for $212.4 Million
The assets of Sea Island Co., the Georgia resort that fell on hard times and filed for bankruptcy protection in August, will be acquired by four firms for $212.4 million. The winning bid was submitted Monday night after an eight-hour auction at Atlanta law firm, King & Spalding. The bid has the approval of Sea Island's lenders and unsecured creditors.
In an unexpected twist, the four firms acquiring the assets include two—Oaktree Capital Management LP and Avenue Capital Group—that had submitted a winning bid of $197.5 million in August. But the bankruptcy process left the door open for an auction and Anschutz Corp. and Starwood Capital Group Global now will join Oaktree and Avenue in the purchase of the assets.
Anschutz and Starwood had been seen as competing bidders for Sea Island's assets, not as partners with Oaktree and Avenue. But during the course of the auction Monday, a joint bid materialized. A break-up fee of nearly $6 million is waived.
Under terms of a pact that must be finalized, an Oaktree-Avenue partnership will now buy the assets with an Anschutz-Starwood partnership.
The partners now will be acquiring a genteel resort that catered to Southern families. The assets being purchased include the Cloister hotel, four golf courses, and a private development called Ocean Forest Golf Club. Sea Island ran into financial trouble in recent years after Bill Jones III, Sea Island chief executive, led a major expansion of the resort, including a $395 million renovation and addition in 2006 and 2007. Sea Island has been in Mr. Jones' family for 84 years.
The sale and bankruptcy forced lenders include Synovus Financial Corp., Bank of America Corp., and the Bank of Scotland unit of U.K. bank Lloyds Banking Group to relinquish some $340 million in loans.
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