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Seasons change for hotelier
Nov. 7, 2006. 01:00 AM
DAVID OLIVE
BUSINESS COLUMNIST
In the biggest deal in his storied career, Toronto entrepreneur Isadore Sharp is taking his Four Seasons Hotels Inc. private in a transaction in which Bill Gates and Saudi Prince al-Waleed bin Talal become the 45-year-old company's largest shareholders.
The proposed deal values Four Seasons at $3.7 billion (U.S.).
Sharp, 75, opened the first Four Seasons Motor Hotel at age 29 in the red-light district of Jarvis and Carlton Sts. in 1961, with partners Eddie Creed, operator of Toronto's swankiest women's apparel emporium, and Murray Koffler, whose fledgling Shoppers Drug Mart then had just two stores.
Sharp, son of a Polish house builder, raised in Toronto's Kensington Market district and a silver-medal graduate in architecture from the Ryerson Institute of Technology (now Ryerson University), later transformed his Don Mills-based firm into the world's leading luxury-hotel brand, with 70 properties in 31 countries, including five-star lodgings in New York, London, Paris, Milan, Tokyo, Sydney, Bali and Nevis, along with the flagship Four Seasons Yorkville in Toronto.
Issy Sharp and his wife, the former Rosalie Wise, are also among Toronto's most ambitious philanthropists, dating from Sharp's role in 1981 in spearheading corporate support for Terry Fox's nascent Marathon of Hope, now the world's largest single-day fundraising event for cancer research.
More recently, it was the Sharps who spurred the long-delayed construction of a Toronto opera house, the Four Seasons Centre for the Performing Arts. They were also the chief sponsors of the expansion of the Ontario College of Art and Design, a dramatic "box on stilts" just south of the Art Gallery of Ontario.
Yesterday's announcement was prompted by succession planning, enabling Sharp to trigger $280 million owed him under a long-term incentive agreement made in 1989. None of the three Sharp children — Jordan, Grey and Anthony — are interested in taking the reins at the firm, although Anthony serves on the Four Seasons board with lead director Robert Prichard, CEO of Toronto Star parent Torstar Corp.
"A change in the ownership of Four Seasons was ultimately inevitable," Sharp said yesterday, "because someday my children would have needed to sell."
If the proposed deal is approved by shareholders, Sharp's family will retain a 10 per cent stake in the firm, while Prince al-Waleed's Kingdom Hotels International, second-largest investor in Four Seasons since the mid-1990s, and Gates's Cascade Investment LLC will each own 45 per cent.
Gates, the world's richest person, has several Canadian investments, including a $1.4 billion stake in Canadian National Railway Co.
The proposed deal is the third this year to remove an international Canadian hospitality company from the stock market.
This year, Prince al-Waleed and U.S.-based Colony Capital LLC paid $3.3 billion for Toronto-based Fairmont Hotels & Resorts Inc., operator of Toronto's Royal York and other historic properties, including Ottawa's Chateau Laurier, Quebec's Château Frontenac and the Banff Springs Hotel.
And Vancouver-based Intrawest Corp., a 30-year-old operator of 10 mountain resorts in the United States and Canada, including British Columbia's Blackcomb-Whistler and a chalet community in Collingwood, Ont., was recently acquired by New York-based private-equity firm Fortress Investment Group LLC for $2.8 billion.
Sharp, who is to remain CEO of Four Seasons, emphasized yesterday that the proposed buyout "does not represent a change in strategy, direction, management or leadership of the company."
That was a message both to the owners of the Four Seasons-managed properties, many of whom have contracts that require Sharp to remain at the company, and to the firm's 31,400 employees, whose respect for the company has made Four Seasons one of only 19 firms to appear each year on Fortune magazine's ranking of the "100 Best Companies To Work For" since the survey's inception eight years ago.
Sharp intends to remain at the helm as Four Seasons pursues its strategy of doubling the number of its properties over the next decade or so, with plans for new hotels in Florence; Marrakech; Beirut; Taipei; Moscow and St. Petersburg, Russia; the Chinese cities of Beijing, Shanghai and Hangzhou; and Mumbai (the former Bombay).
The room rate at the first Four Seasons Motor Hotel was $9 a night. By 2000, Four Seasons was charging $350 to $750 a night for a basic room, and up to $5,200 for the presidential suite at its Four Seasons Mandalay Resort in Las Vegas, and $11,000 for a night's stay in one of the 4,000-square-foot Royal Suites at the newly renovated George V in Paris.
The firm's properties have been a magnet for such celebrities as Elizabeth Taylor, John Travolta and Mary Tyler Moore, who was secretly married at the Four Seasons Pierre; and for tycoons such as Jurgen Schrempp, then CEO of Daimler-Benz AG, who announced the blockbuster 1998 merger of his firm with Chrysler Corp. at the Four Seasons New York.
With today's U.S. mid-term elections, the Four Seasons Georgetown, six blocks from the White House and a favoured power-dining spot of legislators and lobbyists, has been busier than usual as strategy-plotting sessions by both the Republican and Democratic national committees have grown in frequency and urgency.
In contrast to the late Conrad Hilton, Sharp does not hobnob with the rich and famous. Like Gates, Issy and Rosalie Sharp have a passion for low-key pursuits, including contract bridge.
Understated elegance has been the Four Seasons hallmark. "Our competitors interpreted luxury chiefly as dazzling architecture and decor," Sharp has said, "but how important is that to our customers? They are mostly executives, often under pressure, fighting jet lag, stress and the clock. We decided to redefine luxury as service, a support system to fill in for the one left behind at home and the office."
Four Seasons tends to set the top hotel price in each of its locations, usually about 20 per cent higher than its closest rival. In return, Sharp said, "guests get a `fail-safe' experience so that a company is eager to pay the extra $50 to ensure a hassle-free trip for an executive who might be working on a $50 million deal."
www.thestar.com/NASApp/cs...&t=TS_Home
Another Toronto-based world-leading business sells out. I'd love to see great Canadian companies resist buyouts and remain Canadian.
Nov. 7, 2006. 01:00 AM
DAVID OLIVE
BUSINESS COLUMNIST
In the biggest deal in his storied career, Toronto entrepreneur Isadore Sharp is taking his Four Seasons Hotels Inc. private in a transaction in which Bill Gates and Saudi Prince al-Waleed bin Talal become the 45-year-old company's largest shareholders.
The proposed deal values Four Seasons at $3.7 billion (U.S.).
Sharp, 75, opened the first Four Seasons Motor Hotel at age 29 in the red-light district of Jarvis and Carlton Sts. in 1961, with partners Eddie Creed, operator of Toronto's swankiest women's apparel emporium, and Murray Koffler, whose fledgling Shoppers Drug Mart then had just two stores.
Sharp, son of a Polish house builder, raised in Toronto's Kensington Market district and a silver-medal graduate in architecture from the Ryerson Institute of Technology (now Ryerson University), later transformed his Don Mills-based firm into the world's leading luxury-hotel brand, with 70 properties in 31 countries, including five-star lodgings in New York, London, Paris, Milan, Tokyo, Sydney, Bali and Nevis, along with the flagship Four Seasons Yorkville in Toronto.
Issy Sharp and his wife, the former Rosalie Wise, are also among Toronto's most ambitious philanthropists, dating from Sharp's role in 1981 in spearheading corporate support for Terry Fox's nascent Marathon of Hope, now the world's largest single-day fundraising event for cancer research.
More recently, it was the Sharps who spurred the long-delayed construction of a Toronto opera house, the Four Seasons Centre for the Performing Arts. They were also the chief sponsors of the expansion of the Ontario College of Art and Design, a dramatic "box on stilts" just south of the Art Gallery of Ontario.
Yesterday's announcement was prompted by succession planning, enabling Sharp to trigger $280 million owed him under a long-term incentive agreement made in 1989. None of the three Sharp children — Jordan, Grey and Anthony — are interested in taking the reins at the firm, although Anthony serves on the Four Seasons board with lead director Robert Prichard, CEO of Toronto Star parent Torstar Corp.
"A change in the ownership of Four Seasons was ultimately inevitable," Sharp said yesterday, "because someday my children would have needed to sell."
If the proposed deal is approved by shareholders, Sharp's family will retain a 10 per cent stake in the firm, while Prince al-Waleed's Kingdom Hotels International, second-largest investor in Four Seasons since the mid-1990s, and Gates's Cascade Investment LLC will each own 45 per cent.
Gates, the world's richest person, has several Canadian investments, including a $1.4 billion stake in Canadian National Railway Co.
The proposed deal is the third this year to remove an international Canadian hospitality company from the stock market.
This year, Prince al-Waleed and U.S.-based Colony Capital LLC paid $3.3 billion for Toronto-based Fairmont Hotels & Resorts Inc., operator of Toronto's Royal York and other historic properties, including Ottawa's Chateau Laurier, Quebec's Château Frontenac and the Banff Springs Hotel.
And Vancouver-based Intrawest Corp., a 30-year-old operator of 10 mountain resorts in the United States and Canada, including British Columbia's Blackcomb-Whistler and a chalet community in Collingwood, Ont., was recently acquired by New York-based private-equity firm Fortress Investment Group LLC for $2.8 billion.
Sharp, who is to remain CEO of Four Seasons, emphasized yesterday that the proposed buyout "does not represent a change in strategy, direction, management or leadership of the company."
That was a message both to the owners of the Four Seasons-managed properties, many of whom have contracts that require Sharp to remain at the company, and to the firm's 31,400 employees, whose respect for the company has made Four Seasons one of only 19 firms to appear each year on Fortune magazine's ranking of the "100 Best Companies To Work For" since the survey's inception eight years ago.
Sharp intends to remain at the helm as Four Seasons pursues its strategy of doubling the number of its properties over the next decade or so, with plans for new hotels in Florence; Marrakech; Beirut; Taipei; Moscow and St. Petersburg, Russia; the Chinese cities of Beijing, Shanghai and Hangzhou; and Mumbai (the former Bombay).
The room rate at the first Four Seasons Motor Hotel was $9 a night. By 2000, Four Seasons was charging $350 to $750 a night for a basic room, and up to $5,200 for the presidential suite at its Four Seasons Mandalay Resort in Las Vegas, and $11,000 for a night's stay in one of the 4,000-square-foot Royal Suites at the newly renovated George V in Paris.
The firm's properties have been a magnet for such celebrities as Elizabeth Taylor, John Travolta and Mary Tyler Moore, who was secretly married at the Four Seasons Pierre; and for tycoons such as Jurgen Schrempp, then CEO of Daimler-Benz AG, who announced the blockbuster 1998 merger of his firm with Chrysler Corp. at the Four Seasons New York.
With today's U.S. mid-term elections, the Four Seasons Georgetown, six blocks from the White House and a favoured power-dining spot of legislators and lobbyists, has been busier than usual as strategy-plotting sessions by both the Republican and Democratic national committees have grown in frequency and urgency.
In contrast to the late Conrad Hilton, Sharp does not hobnob with the rich and famous. Like Gates, Issy and Rosalie Sharp have a passion for low-key pursuits, including contract bridge.
Understated elegance has been the Four Seasons hallmark. "Our competitors interpreted luxury chiefly as dazzling architecture and decor," Sharp has said, "but how important is that to our customers? They are mostly executives, often under pressure, fighting jet lag, stress and the clock. We decided to redefine luxury as service, a support system to fill in for the one left behind at home and the office."
Four Seasons tends to set the top hotel price in each of its locations, usually about 20 per cent higher than its closest rival. In return, Sharp said, "guests get a `fail-safe' experience so that a company is eager to pay the extra $50 to ensure a hassle-free trip for an executive who might be working on a $50 million deal."
www.thestar.com/NASApp/cs...&t=TS_Home
Another Toronto-based world-leading business sells out. I'd love to see great Canadian companies resist buyouts and remain Canadian.