On Wednesday Four Seasons Hotels and Resorts revealed that Gates’ private investment office, Cascade Investments, had acquired a controlling stake in its company at a valuation of $10 billion.
In the all-cash deal, Gates is paying $2.21 billion to Kingdom Holding, the investment office of Saudi Prince Al Waleed bin Talal Al Saud.
Prior to the deal, Cascade and Kingdom both owned 47.5% of the hotel chain. Gates is essentially buying half of Kingdom’s share, so that when the deal is done he will own 71.25% and Kingdom will drop down to 23.75%. The remaining 5% is still owned by Isadore Sharp, the founder and chairman of Four Seasons.
The 1980s and 90s were boom times for the chain. The 2000s were tougher. The combination of September 11th attacks and dotcom bubble’s bursting ravaged the tourism and travel industries. In 2007 Isadore Sharp sold 95% of the Four Season to Bill Gates and Prince Al Waleed for $3.8 billion.
When the global real estate market exploded a year later, some people called Gates and Al Waleed fools for paying such a high price. Kingdom, which is a public company in Saudia Arabia, wrote down the value of its share of the investment ever year between 2008 and 2012. The valuation was underwater through at least 2015. Fast forward to today and their deal values the company at $10 billion. Patience pays.
Here’s a photo of Bill and one of Prince Al Waleed’s representatives signing the deal in 2007:
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