Published: Wednesday, 08 September 2021 20:58
This is good news for those who like what Bill Gates as a partial owner has done to help Four Seasons grow in recent years. But there is still a lot of uncertainty around when the market will be back to the kind of conditions that help put heads in beds in one of these glitzy hotels. — Cameron Sperance
An affiliate of Cascade Investment, the investment group controlled by Microsoft co-founder Bill Gates, plans boost its investment to a majority ownership stake in Four Seasons Hotels and Resorts for more than $2 billion.
The deal, slated to close early next year, boosts Cascade’s holding from 47.5 percent to 71.25 percent. Cascade plans to buy the stake from Saudi billionaire Prince Al Waleed Bin Talal’s Kingdom Holding Company in an all-cash deal valuing Four Seasons at $10 billion.
“The unwavering support and partnership of our shareholders has and continues to be critical as we capitalize on growing opportunities to serve luxury consumers worldwide,” Four Seasons CEO John Davison said in a statement Wednesday.
Gates, Bin Talal, and Four Seasons founder and chairman Isadore Sharp previously took the Toronto-based hotel company private in 2007 in a more than $3 billion deal. Sharp will retain a 5 percent stake in the company.
Four Seasons currently manages 121 hotels and resorts and has more than 50 projects in its development pipeline, significant growth from the 74 properties it had in its portfolio at the time of the Gates-Bin Talal privatization. Four Seasons has also boosted its profile in the growing luxury residential market tied to hotel branding. The company has 46 residential developments in major cities and resort destinations.
The company’s ties to Gates made headlines in recent months, as the billionaire and his ex-wife, Melinda French Gates, split assets amid their divorce that was finalized last month. Details of how those assets were split remain private.
The deal may be splashy, but anyone involved in the luxury sector at the moment has to have the financial strength to continue to weather an uncertain recovery.
Even during the best weeks for U.S. hotels this summer when the overall hotel market performed better than the same time in 2019, the luxury sector saw declines in revenue per available room — the hotel industry’s key performance metric — according to STR. Four Seasons is a brand that needs wealthy business travelers flying to major, global cities on a regular basis.
Four Seasons did not respond to Skift’s request for comment in time for publication, but all eyes appear to be on growth despite the luxury sector’s weaknesses in urban markets during the pandemic.
“Our company is at yet another key moment in its storied history and the confidence of our shareholders in Four Seasons and our strategic vision help position the iconic Four Seasons brand for continued success,” Davison said in his statement.
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