Saudi Prince Alwaleed bin Talal said in an interview with Bloomberg TV on Wednesday that he is considering strategic options for Four Seasons Hotels and Resorts and FRHI Hotels & Resorts, including an IPO or merger. Prince Alwaleed is a major stakeholder in each company.
The founder and chairman of Saudi Arabia’s Kingdom Holding Co., who took a 95% stake in Four Seasons with Bill Gates’ Cascade in 2007, said, “Our objective right now is to grow both companies and have a monetization process. The hotel industry is facing major upside right now. This may go on another three or four years. So there is a zone of opportunity for us right now.”
Kingdom holds a 47.5% stake in Four Seasons, while Cascade also holds 47.5%, and 5% of the Four Seasons is owned by company founder and chairman Isadore Sharp.
Four Seasons hired Allen Smith, the head of Prudential Real Estate Investors, as chief executive officer in August after a five-month search. In an October interview with HOTELS, Smith stated about a potential IPO that, “The end game for me is to focus on continuing to strengthen the brand and grow the company. There has been no discussion with me about an IPO and it is not in and of itself an objective I have been told I need to achieve. Anytime a company is private there is always speculation about when it will go public. But it is not part of what I am focused on and there is no horizon associated with that I am trying to address.”
Alwaleed also led in 2006 a group of investors, including Colony Capital, in a US$3.24 billion takeover of FRHI, the parent company for the Fairmont, Raffles and Swissotel brands. He currently has a 35% stake in FRHI after cutting his holdings from 58% two years ago to bring in new investment from Voyager Partners Ltd. and pave the way for an IPO, Alwaleed said at the time.
Alwaleed also said Wednesday, “Clearly we’ll defer to management but they have my views very clear,” adding that he had met executives at the two companies in Toronto in recent days.
A spokesperson for FRHI Hotels & Resorts told HOTELS, “We are aware of the comments and agree that the idustry is in healthy cycle. But for us, we continue to look at market conditions and opportunities and review any opportunities to grow the company and maximize shareholder value. I dont see anything imminent in the short term and we will continue to review and explore opportunities.”