[BITList] Off Topic - Raffles For Sale

[John Feltham]

Prince Alwaleed of Saudi Arabia calls time on Raffles Hotel
	
Dominic Walsh | April 16, 2009

Article from: Times Online
A BYWORD for colonial grandeur, and a favourite watering hole of such  
literary luminaries as Somerset Maugham, Joseph Conrad and Rudyard  
Kipling, Raffles Hotel, home to the Singapore Sling cocktail, has been  
put up for sale for up to $US450 million.

Apparently, the hotel's owner, Prince Alwaleed of Saudi Arabia, is  
feeling the pinch.

The Times understands that Fairmont Raffles Hotels International, in  
which the Prince's Kingdom Holding Company (KHC) has a controlling  
stake, is seeking buyers for its remaining hotel assets, despite the  
depressed state of the property market, and it is understood he may  
even be prepared to sell his stake in the company itself.

Hotel industry sources believe that the Prince, dubbed the Warren  
Buffett of the Gulf, is looking at a range of disposals in response to  
the sharp fall in value of some of his biggest investments. KHC has  
seen a big drop in the value of its investments in companies including  
Songbird Estates, the majority owner of Canary Wharf, Euro Disney and  
News Corporation, parent company of The Times.

Kingdom Hotel Investments, a small London-listed vehicle in which he  
has a 55percent stake, has lost more than two thirds of its value in  
the past 12 months.

But it is his 3.9percent stake in Citigroup, long seen as a bellwether  
of his fortunes, that has caused the biggest hole in his wealth,  
falling from more than dollars 50 a share two years ago to less than  
dollars 4. In October he sought to stabilise the situation by upping  
his holding to 5percent, but the shares have continued to fall.

According to Fortune, the Prince's wealth has fallen from $US21  
billion to about $US13 billion over the past year, putting him 22nd in  
the magazine's list of the world's top billionaires, although the  
Prince himself claimed the figure understated his riches.

But industry insiders insist that the Prince is keen to raise funds by  
selling parts of his huge hotel empire. While his 45 per cent holding  
in Four Seasons, the luxury operator, is said to be sacrosanct, there  
are strong rumours that he may be willing to entertain offers for his  
33 per cent stake in Movenpick Hotels, the Swiss chain. Some say that,  
for the right price, he would even consider selling The Savoy, in  
London, which is due to reopen at the end of the year after a  
$US150million refurbishment.

"He's having a very challenging time," one analyst, who is intimately  
acquainted with the Prince's affairs, said. "He's definitely a seller  
rather than a buyer. He'd sell just about anything at the right price,  
although finding buyers able to fund such deals is the challenge."

Fairmont Raffles, created from the merger three years ago of the  
Fairmont and Raffles groups, is a joint venture with Colony Capital,  
the US investment firm that once co-owned The Savoy. The group has 123  
hotels under the Fairmont, Raffles, Swissotel and Delta brands.

Since the merger, the group has focused on becoming an operating  
company by selling most of its assets under sale and manage-back  
deals, including the Fairmont Banff Springs, in the Rocky Mountains,  
and the Fairmont Acapulco Princess, in Mexico.

Property industry sources said that the group was now becoming "more  
flexible" on price in an attempt to shift its remaining assets,  
including Raffles itself, which is tipped to fetch between $US350  
million and $US450 million.

Other assets for sale include the Fairmont Copley Plaza, in Boston,  
and the Fairmont Hotel Vier Jahreszeiten, in Hamburg, although the  
sale of the latter has been hampered by the huge investment required.

KHC could not be reached for comment.