Companies owned by Bill Gates and a Saudi prince announced on Monday that they had joined forces with the founder and chief executive officer of Canadian hotel giant Four Seasons in a bid to take the company private for US$3.7 billion, or US$82 per share in cash.
The offer was made by Four Seasons chairman and CEO Isadore Sharp, who founded the company in 1960 with one small hotel in downtown Toronto, and Triples Holdings Ltd, the controlling shareholder, along with Kingdom Hotels International and Gates' Cascade Investment LLC.
Kingdom Hotels is owned by a trust created by Prince Alwaleed Bin Talal Alsaud, believed to be the wealthiest businessman in the Muslim world. A nephew of the late King Fahd, Prince Alwaleed is worth upward of US$20 billion, according to Forbes magazine.
The Toronto-based company said it has set up a special committee of independent directors to consider the offer and make recommendations.
"This transaction is intended to ensure the legacy of the Four Seasons," Sharp told reporters in a teleconference. "This proposal achieves all my objectives for Four Seasons and my family, and is the only one that I am prepared to pursue.''
Almost 21 percent of the limited voting shares are held by the Kingdom group. Joining them in the bid to buy out other stockholders is Cascade, an entity owned by Gates, co-founder of the world's largest software company, Microsoft. It owns about 8 percent of Four Seasons shares.
Calls to Microsoft for comment were not returned; as well as calls to the Ontario Teachers' Pension Plan, which owns 44,211 shares.
Another large shareholder behind Kingdom is Bank of America's Marsico Capital Management, based in Denver. A spokeswoman for the company, which owns 6 million shares, or 16.4 percent, said they do not comment on potential transactions.
Sharp and Triples agreed Kingdom and Cascade would acquire the limited voting shares of the Four Seasons for US$82 per share, a 28.4 percent premium over its Friday closing price of US$63.87 on the New York Stock Exchange. Triples, which is the Sharp family's holding firm, would keep its Four Seasons investment.
Shares of Four Seasons rose US$20, or 31 percent, to $83.87 in morning trading.
If the transaction is completed, Triples would hold about 10 percent of Four Seasons' shares through a separate class of special voting shares. The balance of the stock would be split equally between Kingdom and Cascade.
Sharp would remain Four Seasons chairman and chief executive, continuing to direct all aspects of day-to-day operations and strategic direction of the company, which would remain headquartered in Toronto.
The proposed transaction is subject to shareholder and regulatory approvals.