Luxury hotel operator Four Seasons Hotels Inc said on Monday it agreed to accept a US$3.37 billion going-private offer from its chief executive and firms owned by Bill Gates and a Saudi prince.
Under the terms of the agreement, parties including Gates' Cascade Investment LLC, Kingdom Hotels International and Isadore Sharp, Four Seasons' chairman and chief executive, will buy the Toronto company for US$82 per share. Kingdom Hotels is owned by a trust created by Saudi Prince Alwaleed Bin Talal, a nephew of the late King Fahd and one of the richest businessmen in the Middle East.
When the transaction is completed, Sharp will receive a one-time payment of US$289 million related to a long-term incentive agreement approved by the company's shareholders in 1989.
28 percent premium
The price represents a premium of 28 percent over the company's closing price on Nov. 3, the last trading day on the New York Stock Exchange before the announcement of the bid. Including assumed debt, the company valued the deal at US$3.8 billion.
Four Seasons' shares fell US$2.49, or 3 percent, to US$81.39 in afternoon trading on Monday on the New York Stock Exchange.
The company's board of directors has already approved the transaction, which is expected to close in the second quarter, subject to shareholder approval, among other conditions. Shareholders will vote on the deal in April.
`delighted'
"I am delighted that the board, after considering the recommendations developed by the Special Committee and its advisers, has determined to support what I believe is the best way to preserve and expand the long-term strategy, vision and core values of Four Seasons," Sharp said.
Under an agreement Sharp made with the company in 1989, if the company were to be sold, he would receive a payment based on the sale price, plus another payment if the price per share was 25 percent higher than the weighted average trading price for the preceding six months.
That's how his US$289 million, one-time payment was calculated. Under the deal, Sharp and his family would also retain a 10 percent ownership stake after the company goes private, with remaining shares split between the private equity companies owned by Gates and Prince Alwaleed.
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