Four Seasons Hotels has accepted a $3.8 billion buyout offer from an investor group including firms headed by Microsoft Corp. chairman Bill Gates, Saudi mogul Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud and Four Seasons CEO Isadore Sharp, the company announced today. Pending shareholder approval, the deal will take the hotel company private by the second quarter of this year.
The deal leaves Sharp in a position of significant control of the Toronto-based company through his own holding company, Triples Holdings Limited. Gates' Cascade Investment and Prince Alwaleed's Kingdom Hotels International, both of which already hold a stake in Four Seasons, joined Sharp in the offer. Under the terms of the agreement, Sharp will hold a 10 percent stake in Four Seasons, and the rest will be split evenly between the other two firms. Sharp also will receive $289 million out of the deal as a result of a shareholder-approved incentive agreement.
The $3.8 billion, which includes debt, translates to $82 per share, a 28.4 percent premium over Four Seasons' closing price on the New York Stock Exchange on Nov. 3 and a 33.1 percent premium over the average closing price for the six months prior to that.
Four Seasons' board of directors unanimously approved the transaction, first announced as an offer in November
(BTNonline, Nov. 6, 2006). The deal requires approval from two-thirds of shareholders, and they will vote in April.
This is Kingdom Hotels International's second foray into the North American luxury tier in recent years. In January 2006, it joined with Colony Capital to acquire Fairmont Hotels & Resorts for $3.9 billion
(BTNonline, Jan. 20, 2006). Analysts said growth within the luxury tier has made it an attractive target for investors.