Bill Gates’ investment firm will pay Saudi billionaire Prince Alwaleed bin Talal $ 2.2 billion to increase his stake in Four Seasons Holding Co.
Cascade Investment LLC will buy a 23.75% stake in Kingdom Holding Co, giving the company an enterprise value of $ 10 billion. As part of the all-cash deal, Cascade’s stake will increase to 71.25%.
Kingdom Holding will use the proceeds for investments and to repay certain outstanding loans. The deal is expected to be finalized in January 2022. Four Seasons chairman Isadore Sharp will retain his 5% stake.
Four Seasons shareholders took the company private in 2007, with Gates and Alwaleed leading the transaction. The new owners have extended the company’s footprint to more markets in an effort to capitalize on a growing luxury travel market.
Four Seasons operated 74 hotels when it agreed to be acquired by Gates and Alwaleed. Today, it operates 121 properties, with more than 50 projects underway.
It has also stepped up efforts to attach its brand to luxury homes, as real estate developers realized that affluent buyers would pay more to live in a condo or residential community associated with the hotel brand.
The relationship between Bill Gates and Prince Alwaleed dates back decades. Gates described him as an “important partner” in their charitable work together in November 2017. The Microsoft founder and philanthropist was one of the few Western executives to express support for the prince while he was detained at the Riyad Ritz-Carlton hotel and charged with corruption. by Crown Prince Mohammed ben Salman.
Alwaleed has made a series of deals since reaching a “confirmed deal” to get his release from detention in 2018. Shortly after, he invested around $ 270 million in the music streaming service Deezer. He sold a stake in his label Rotana Music to Warner Music Group Corp in February.
Cascade, which is led by Gates fund manager Michael Larson, first invested in Four Seasons in 1997, when the company was publicly traded.
Gates, who is worth $ 152.2 billion, according to the Bloomberg Billionaires Index, officially ended his 27-year marriage last month and keeps most of the ex-couple’s public fortune through Cascade. French Gates received nearly $ 6 billion in shares of public companies, according to the documents.
Details of the split from the couple’s enormous fortune are kept under wraps, so it may be that other private assets have been transferred to French Gates.
Cascade also manages the endowment of the Bill and Melinda Gates Foundation, of which Gates and French Gates are co-chairs.
After the pandemic
The accommodation industry has just had its worst year in the modern industry, with the Covid-19 pandemic stopping travel around the world. Vaccination campaigns have sparked a rebound in accommodation led by leisure travelers, but luxury hotels still lag behind lower-quality properties, STR data shows. and it now manages 121 hotels and resorts, and 46 residential properties in 47 countries.
Four Seasons has nearly two dozen hotels in the Middle East and Africa, including one in Riyadh, the capital of Saudi Arabia, in the famous Kingdom Tower. It is a popular hotel among consultants and bankers who have helped transform the country’s economy and who commute from nearby Dubai.
Prince Alwaleed holds stakes in Citigroup Inc., the ride-sharing company Lyft Inc. and Accor SA through the investment company. He has also made several large-scale technological investments.
Alwaleed’s wealth has halved since 2014 to $ 18.4 billion, from a high of $ 36 billion, according to the Bloomberg Billionaires Index. The prince previously said in an interview that the drop was due to a drop in Kingdom Holding shares and not a deal or settlement he made while in detention.
About half of Alwaleed’s wealth is tied to shares in the holding company, in which he has a 95% stake.
The investment firm reported a loss of 1.47 billion riyals ($ 392 million) last year. The value of his other holdings – including Saudi properties, public and private stocks, jewelry and a superyacht – helped mitigate some of the losses, according to figures previously provided by Alwaleed’s investment firm.
The Kingdom’s stock rose 1.1% on Wednesday, giving it a market cap of around 40 billion riyals.
(Updates with context starting at fourth paragraph.)
-With help from Matthew Martin, Reema Alothman and Patrick Clark.