Travel, Tourism & Hospitality
Kingdom Holding to sell 24pc Four Seasons stake for $2.2bn
Saudi-based Kingdom Holding Company has announced that one of its affiliates has signed an agreement with Bill Gates’ investment firm to sell a 24% stake in luxury hospitality group Four Seasons Hotels and Resorts for $2.2 billion in an all-cash deal.
Kingdom Holding Company (KHC) has announced that one of its affiliates today (September 8) signed a definitive agreement to sell a 23.75% interest in Four Seasons Hotels and Resorts to an affiliate of Cascade Investment, its long-term investment partner in the luxury hospitality group.
The transaction is being concluded on the basis of an enterprise value for Four Seasons of $10 billion with cash proceeds to KHC of $2.21 billion, said the statement from KHC.
In the all-cash deal, Cascade will increase its existing 47.5% stake to 71.25% by purchasing half of the existing 47.5% stake from KHC. Four Seasons Founder and Chairman Isadore Sharp, through Triples Holdings Limited, will retain his 5% stake, the statement added.
The transaction is likely to be completed in January 2022, pending regulatory approvals and the satisfaction of other customary closing conditions.
Through this deal, KHC is expected to report a gain of $1.57 billion.
KHC said following the transaction and through its affiliate’s ownership of 23.75% in Four Seasons, it remains strongly committed to the group and looks forward to continuing to assist Four Seasons with its growth plans.
The Saudi group’s involvement with Four Seasons dates back to 1994 when it had identified Four Seasons as a possible global leader in the luxury hotel management sector. At that time, an affiliate of KHC acquired a strategic minority interest in the luxury hotel chain via a partial public take-over bid.
The investment was a ‘win-win’, with KHC assisting Four Seasons’ strategic growth plans by acquiring and developing numerous international luxury hotels for the Four Seasons brand, including the flagship George V Hotel in Paris.
Following the transaction, an affiliate of KHC will continue to own a 23.75% stake in Four Seasons and will continue to support the company and its considerable growth opportunities through KHC’s ongoing representation on the Board of Directors, and its ownership of Four Seasons-branded luxury properties.
Since 2007, Four Seasons has been owned privately by an affiliate of KHC, Cascade Investment, a private investment entity that holds the assets of Bill Gates, and Isadore Sharp.
With the support of its shareholders, Four Seasons has indeed become the leading luxury hospitality group, operating 121 hotels and resorts and 46 residential properties in 47 countries and with over 40,000 employees.
Avington Financial Limited acted as exclusive financial advisor and Hogan Lovells as legal advisor to Kingdom Holding Company in connection with the transaction.