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Four Seasons Hotels agrees to bid from Gates and Alwaleed

Four Seasons agrees to be taken private

NEW YORK: Four Seasons Hotels, the manager of 74 luxury hotels, said Monday that it had agreed to be taken private by Bill Gates, Prince Alwaleed bin Talal and the chief executive for $3.8 billion, including debt.

Shareholders would get $82 a share in the purchase, which was first proposed in November, said the company, which is based in Toronto. The chief executive, Isadore Sharp, would receive $289 million in the deal.

Hotel companies have become takeover targets as travel increases to the world's largest cities while the supply of new hotel rooms is lagging behind.

Four Seasons, whose hotels include the George V in Paris and the Beverly Wilshire in Beverly Hills, California, operates in 31 countries.

"Interest in deals in the sector will continue unabated, if not increase," said Amit Kapoor, a lodging industry analyst at Gabelli in Rye, New York. "Lodging companies will remain in the cross hairs of private equity buyers or even strategic buyers."

Shares of Four Seasons closed at $81.36, down $2.52, or 3 percent, on the New York Stock Exchange.

The stock has risen 31 percent since Nov. 3, the last trading day before the purchase was first proposed.

Shares rose above $82 after the purchase announcement on speculation among investors of an increased offer from the buyers, Kapoor said.

Four Seasons hotels make up 4 of the top 10 properties in the world as ranked by Condé Nast Traveler. A standard room at the Four Seasons New York in midtown Manhattan costs around $815.

Alwaleed is bidding through Kingdom Hotels International, and Gates, the Microsoft chairman, will purchase his stake through Cascade Investment.

In April, Kingdom & Colony Capital acquired Fairmont Hotels & Resorts, the Toronto-based hotel chain that manages the Savoy of London and Chateau Frontenac in Quebec City, for $3.24 billion.

In Britain, David and Frederick Barclay, the billionaire brothers, have amassed a 5 percent share in InterContinental Hotels Group, the world's largest lodging company by rooms, leading to speculation about a possible takeover bid.

The purchase of the Four Seasons, which was approved by the company's board, requires the vote of two-thirds of shareholders at a meeting that may be held in April, the company said.

Alwaleed is Four Seasons' biggest holder, with 7.57 million shares, or 22 percent of the company as of Feb. 2. The Gates Foundation held 1.98 million shares, making it the fifth-largest stockholder.

Gates and Alwaleed have collaborated for at least two years. After attending a dinner at Gates's home in Bellevue, Washington, in early 2004, Alwaleed agreed to explore ways to assist Microsoft's expansion in Saudi Arabia.

Sharp, the chief, and his family would continue to hold a "significant" share of the company. He will be directly involved in the chain's operations and strategy, Four Seasons said.

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