CHICAGO Strategic Hotels & Resorts Inc. has agreed to acquire Four Seasons-branded properties in Wyoming and California in exchange for about US$95 million worth of stock.
The Woodbridge Co. Ltd., an investment vehicle of Canada’s Thomson family, will sell the 181-key Four Seasons Resort Jackson Hole and the 200-key Four Seasons Silicon Valley to Strategic for 15.2 million shares of common stock priced at US$6.25 per share. The implied purchase price equates to nearly US$250,000 per key.
Strategic intends to sell an additional 8 million shares of common stock to Woodbridge, resulting in gross proceeds of US$50 million that will be used to pay down the company’s revolving credit facility. The transactions are expected to close in the first quarter.
“This is a highly-compelling and unique opportunity for Strategic Hotels, with a cost per room of under US$300,000,” says Strategic CEO Laurence Geller. “It adds two high-quality, unencumbered assets to our portfolio, deepens our ownership within the Four Seasons brand, and will welcome a sophisticated and successful investor into our stock. Upon closing, the transaction will be immediately accretive and will be consistent with our long-stated strategy of deleveraging our balance sheet.”
Strategic Hotels has asset-managed both properties on behalf of Woodbridge for the past two years.
“Strategic Hotels is the ideal acquirer for both of these properties, given their deep knowledge of these assets, their proven investment expertise and longstanding relationship with the Four Seasons brand,” says Woodbridge President W. Geoffrey Beattie. “We see an excellent growth opportunity in Strategic Hotels’ long-term vision and near-term strategic plan.”
The seven-year-old Four Seasons Resort Jackson Hole includes 124 guestrooms, 45 private residences—of which 33 are included in the hotel’s guestroom supply—and 12 fractional units. The resort has received a Forbes 5-Star Award for a fourth consecutive year.
The five-year-old Four Seasons Silicon Valley features 7,000 sq. ft. of event space. Located in the hub of Silicon Valley and 10 minutes from Stanford University campus, the hotel is the centerpiece of the new University Circle complex and the gateway to Palo Alto’s most exclusive residential area.
Both hotels are in excellent physical condition with no deferred capital maintenance requirements, Strategic says.
