GATES

TORONTO, Canada (Reuters):

Saudi Prince Alwaleed bin Talal and an investment firm owned by Microsoft Corp chairman Bill Gates launched an offer for Four Seasons Hotels Inc. yesterday in a move aimed at privatising the Canadian luxury hotel group.

News of the bid, which values the company at US$3.7 billion, from two of the world's richest men, sent the company's stock leaping by more than 30 per cent, quickly topping the bid price of US$82 a share in cash.

On the New York Stock Exchange, Four Seasons jumped $19.04 to US$82.91, while in Toronto, the stock was up C$21.67 at C$93.78 in midday trading.

No counter-bid

Indeed, Research Capital analyst Jacques Kavafian said a counterbid was unlikely.

"These are good quality investors, and Sharp would not sell to fast money private equity firms, so I don't see another player coming in the picture," Kavafian said.

The offer was timed well, he said, given that Four Seasons, which manages about 68 hotels around the world, will soon benefit from a booming travel market.

"We think (Four Seasons) earnings are just about ready to take off with travel demand being so strong over the last two years," Kavafian said.

The suitors for Four Seasons include Prince Alwaleed's Kingdom Hotels International, Gates' Cascade Investment LLC and Four Seasons' founder Isadore Sharp and his family holding company, Triples Holdings Ltd.

The group's bid represents a 28.4-per cent premium over Four Seasons' closing share price on Friday. Based on outstanding shares of 33.1 million, the deal is worth US$2.7 billion.

This is Prince Alwaleed's second foray into the Canadian hotel segment this year. In January, his Kingdom Hotels joined forces with a U.S. investment group to acquire another luxury chain, the Fairmont Hotels & Resorts, for US$3.9 billion.

Deutsche Bank Securities analyst Bill Lerner estimated that the US$82-a-share offer values Four Seasons at a ratio of 44.4 times the expected fiscal 2007 earnings per share and 31.9 times the expected 2007 EV/EBITDA.