Damsel in distress Fairmont Hotels and Resorts Inc. found a prince to rescue it from the grasp of American hedge fund manager Carl Icahn this week.
Fairmont’s 87 properties, including the Chateau Whistler, will be acquired by one of the richest men in the world, HRH Prince Alwaleed bin Talal bin Abdulaziz Alsaud. Through his family-owned Kingdom Hotels International and Colony Capital the Saudi prince purchased controlling interest at US$45/share totalling US$3.9 billion, including assumed debt. Kingdom already owns 3.9 million common shares of Fairmont.
A second investor in the deal is U.S. hotel property owner Thomas Barrack, whose 33-hotel chain, Raffles, will merge with Fairmont.
"We are very excited about this transaction as it delivers value to our shareholders and creates an expanded foundation from which to build on our legacy, grow our brand and create significant opportunities for our employees," said William Fatt, Fairmont CEO in a news release.
Fairmont had been shedding itself of lucrative properties recently in a bid to build a war chest to fend off a hostile takeover bid by corporate raider Icahn. Bay Street analysts had noted that undervalued Fairmont was ripe picking for financiers like Icahn who realized the significant value of breaking up the brand.
Icahn had bid US $40 per share for controlling interest in December when he owned 9.3 per cent of Fairmont stock.
The sale, if approved by shareholders in April, will combine Fairmont’s hotels with Raffles, but will allow Fairmont to remain independent and Toronto-based.
"It will be business as usual," said Jill Killeen, Fairmont regional public relations director based in Vancouver.
Shares rose 26 cents to $50.70 on the TSX by end of Monday.