Gateway to luxury

The Four Seasons hotel chain, one of the last publicly traded luxury hotel brands, will likely find itself under very wealthy new ownership.

Bill Gates, best known for his role as the tech wizard who founded Microsoft or as the world's most prominent billionaire-philanthropist, may find himself in the hotel business before long. Although new to the game, he'll have some experienced partners.

In partnership with Saudi prince al-Waleed bin Talal and Four Seasons founder Isidore Sharp, Gates is backing a $3.7-billion (€2.9 billion) management buyout of the Four Seasons hotel chain.

The Toronto-based hotel company was one of the last publicly traded luxury brands, following the private equity-backed acquisitions of upscale rivals such as the Raffles Hotel Group, The Savoy Group, Fairmont Hotels and Resorts and Société du Louvre.

If the deal is approved, Gates' Cascade Investments and bin Talal's Kingdom Hotels will become the major stakeholders in the company. Triples Holdings Limited, Sharp's family investment firm, will retain about 10 percent of the company. The remaining ownership stake would be split equally between the world's richest man and the Saudi prince.

Sharp, who founded Four Seasons with one hotel in Toronto in 1961 and has built into a luxury hotel empire that manages 71 hotels spread across 31 countries, has refused to consider any other offers.

“This transaction, with these investors, is the only one I am prepared to pursue,” Sharp said in a statement.

Some have publicly speculated that Sharp is increasingly interested in the valuable real estate around some Four Seasons properties, but that the realities of running a public company didn't give him the freedom to pursue a real estate-oriented strategy. As part of the deal, Sharp would cede much of his voting control to the entities controlled by Gates and bin-Talal, but would retain a say in the company's future.

While Sharp is looking to retain influence over the company he built, bin Talal and Gates, who already held large stakes in the company, are buying in for different reasons. The price already controls a small real estate empire that includes interests in nine Four Seasons properties.

Some have speculated that Gates, who controls the world's biggest technology company, is looking at the convergence between hotels and technology even though Four Seasons has traditionally focused on paying personal attention to its guests.

“While Four Seasons isn't talking about its tech plans, it's hard not to wonder: Now that the world's richest computer nerd owns a hotel chain, can robot concierges be far behind?” Ivor Tossel wrote in a column in The Globe and Mail.

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