Bill Gates firm buys Saudi Prince Alwaleed Four Seasons stake

Cascade Investment LLC – billionaire Bill Gates’s firm – will pay Saudi billionaire Prince Alwaleed bin Talal’s Kingdom Holding Co $2.2bn for a 23.75 percent stake in Four Seasons Holding Co.

Four Seasons shareholders took the company private in 2007, with Bill Gates (above) and Prince Alwaleed bin Talal leading the deal [File: Andrew Harrer/Bloomberg]

Bill Gates’s investment firm will pay Saudi billionaire Prince Alwaleed bin Talal $2.2 billion to raise its stake in Four Seasons Holding Co.

Cascade Investment LLC will buy a 23.75% stake from Kingdom Holding Co, giving the business a $10 billion enterprise value. 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 some outstanding loans. The deal is expected to close 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 deal. The new owners expanded the company’s footprint to more markets in a bid to capitalize on a booming market for luxury travel.

Four Seasons managed 74 hotels when it agreed to be acquired by Gates and Alwaleed. Now it operates 121 properties, with more than 50 projects in the pipeline.

It’s also expanded 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.

‘Important Partner’

The relationship between Bill Gates and Prince Alwaleed stretches 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 a few western executives who voiced support for the prince while he was detained at Riyadh Ritz-Carlton hotel and accused of corruption by Crown Prince Mohammed Bin Salman.

Alwaleed has made a series of deals since he reached a “confirmed understanding” to secure his release from detention in 2018. Shortly after, he invested about $270 million into music streaming service Deezer. He sold a stake in his Rotana Music label to Warner Music Group Corp in February.

Cascade, which is run by Gates’s money manager Michael Larson, first invested in Four Seasons in 1997 when the company was public.

Gates, who is worth $152.2 billion, according to the Bloomberg Billionaires Index, officially ended his 27-year marriage last month and retains most of the ex-couple’s public fortune through Cascade. French Gates has received almost $6 billion in shares of public companies, according to filings.

Details of how the couple’s enormous fortune is being split up are confidential, so there may be more private assets that have been transferred to French Gates.

Cascade also manages the endowment of the Bill and Melinda Gates Foundation, where Gates and French Gates are co-chairs.

After Pandemic

The lodging industry is coming off its worst year in modern industry, with the Covid-19 pandemic halting global travel. Vaccination campaigns have sparked a lodging rebound led by leisure travelers, but luxury hotels are still lagging lower-quality properties, according to data from STR. and it now manages 121 hotels and resorts, and 46 residential properties in 47 countries.

Four Seasons has almost two dozen hotels in the Middle East and Africa, including one in Saudi Arabia’s capital Riyadh in the landmark Kingdom Tower. It is a popular hotel among the consultants and bankers who’ve helped transform the country’s economy and who commute from nearby Dubai.

Prince Alwaleed has stakes in Citigroup Inc., ride-hailing firm Lyft Inc., and Accor SA through the investment firm. He has also made several high-profile technology investments.

Prince’s Fortune

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 during in interview that the decline was due to a slump in Kingdom Holding’s shares and not because of any agreement or settlement he made during his detention.

About half of Alwaleed’s wealth is tied to shares in the holding company, in which he owns a 95% stake.

The investment company reported a loss last year of 1.47 billion riyals ($392 million). The value of his other holdings — including Saudi property, public and private equities, jewelry and a superyacht — helped mitigate some of the losses, according to figures previously provided by Alwaleed’s investment firm.

Kingdom’s stock rose 1.1% on Wednesday, giving it a market capitalization of about 40 billion riyals.

(Updates with context starting in fourth paragraph.)
-With assistance from Matthew Martin, Reema Alothman and Patrick Clark.

Source: Bloomberg