Bill Gates increases stake in Four Seasons - The Globe and Mail

Four Seasons Hotels and Resorts founder Isadore Sharp at the opening ceremony of the new Four Seasons hotel on Yorkville Ave. in Toronto on Oct. 05 2012. Microsoft co-founder Bill Gates' investment fund reached a deal to acquire a controlling stake in the luxury hotel chain, the companies announced Sept. 8.

Fernando Morales/The Globe and Mail

Microsoft co-founder Bill Gates will boost his ownership in iconic Canadian hotelier Four Seasons Hotels Ltd., taking a controlling interest in the company.

Mr. Gates’s personal investment company, Cascade Investment LLC, will spend US$2.21-billion to buy a 23.75-per-cent stake in Four Seasons from Saudi Prince Alwaleed bin Talal’s investment company, Kingdom Holding Co. The deal will take Cascade’s ownership to 71.25 per cent, with Kingdom and Four Seasons founder Isadore Sharp owning the remainder.

Mr. Sharp started Four Seasons by building a motel with his father in a then-seedy part of Toronto; that motel opened in 1961. Four Seasons now operates 121 hotels and resorts and 46 residential properties in 47 countries, with more than 50 projects in planning or under development. The Gates deal announced Wednesday values the company at US$10-billion, with Mr. Sharp, who turns 90 next month, owning 5 per cent.

Four Seasons is a hotel-management firm, with other investors typically owning the land and buildings. This includes Prince Alwaleed, who owned the Four Seasons in Toronto until selling it in 2016 for $225-million to Florida billionaire Shahid Khan.

The brand trades on luxury and is priced accordingly: A check of rates for the Toronto Four Seasons in Yorkville for Wednesday evening showed rooms priced at $780 to $855, with suites at $995 to $2,515. The Presidential Suite – 2,120 square feet with city views on three corners – was $12,000.

Mr. Sharp turned to the Kingdom of Saudi Arabia in the mid-1990s, when Four Seasons was under pressure to reduce its debt. Prince Alwaleed agreed to take a 25-per-cent stake in the company and allow the hotel founder to keep a controlling position.

Now, Mr. Gates is apparently providing some assistance.

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In 2017, Saudi officials accused Prince Alwaleed of money laundering, bribery and extortion as part of a wide-ranging campaign against public corruption. Maintaining his innocence, the Prince was released two months later.

While Prince Alwaleed has made deals since his release, Kingdom, his diversified holding company, has reported losses, in part owing to its hospitality holdings, which have been buffeted by the pandemic and the steep drop in travel. Kingdom also used to control Fairmont Hotels & Resorts Inc., which traces its roots to the hotel arm of Canadian Pacific Railway Ltd. Kingdom sold the Fairmont chain to Accor SA of France and now has a 6-per-cent stake in Accor.

Kingdom also has investments in ride hailing with Lyft Inc., Uber Technologies Inc. and Careem Networks FZ LLC; e-commerce, digital services and social media with Chinese retailer JD.com Inc., Twitter Inc. and music-streamer Deezer SA; and in banking and financial services with Citigroup and Saudi Fransi Bank.

Mr. Gates’s Cascade first invested in Four Seasons in 1997, when the hotel chain was public, and participated in a going-private transaction in 2007. The new additional investment, Cascade said in a statement Wednesday, “strengthens its commitment to provide Four Seasons with resources to accelerate growth and expand its strategic goals.”

According to Bloomberg, Mr. Gates has a net worth of US$152.2-billion, but it’s not known how he split his assets with ex-wife Melinda Gates when the couple finalized their divorce earlier this year. Bloomberg says Prince Alwaleed’s net worth is $18.4-billion, about half what it was in 2014.

Mr. Gates left the CEO job at Microsoft in 2000 and stepped down from the company’s board in 2020.

In a 2018 interview with The Globe and Mail, Mr. Sharp said he saw Prince Alwaleed as someone who would uphold the Four Seasons name, and he couldn’t see either Mr. Gates or the Prince divesting their stakes. “These are two companies that never have to sell. My relationship with the Kingdom and Cascade is golden.”

With reports from Rachelle Younglai

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Bill Gates increases stake in Four Seasons - The Globe and Mail
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