Prince Alwaleed announces float of US$2 billion-worth of assets

PRINCE Alwaleed Bin Talal, the world’s richest Arab, last week revealed plans to float hotel and media assets worth more than US$2 billion in Dubai and London over the next two years.

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By  Rhys Jones Published  July 24, 2005

PRINCE Alwaleed Bin Talal, the world’s richest Arab, last week revealed plans to float hotel and media assets worth more than US$2 billion in Dubai and London over the next two years. He revealed that he planned to sell shares in his Middle Eastern joint venture Kingdom Hotels Investment Group (KHI) before the end of the year. With an estimated fortune of US$24 billion, Prince Alwaleed is the fifth richest man in the world. The public company will comprise a portfolio of hotels in the Middle East and Africa, including a group of resorts in Kenya recently purchased from Lonrho. The prince will retain his stake in Western hotels such as The Savoy in London, George V in Paris and a large stake in Four Seasons Hotels and Resorts. “The company will be worth more than US$1 billion, with a dual listing in Dubai and London,” said Prince Alwaleed, adding that he did not yet know how much of the companies he would be selling nor which investment banks he would enlist to manage the flotation. He also revealed plans to float Rotana Audiovisual, the media conglomerate whose interests range from Arabic music to free-to-air broadcasting. The initial public offering is likely to happen next year. Although a dual listing had not been confirmed, the company is likely to be quoted in Dubai and London, according to the Prince Rotana is the largest producer and distributor of Arabic music, with more than 100 of the top Arabic recording artists signed to its labels, as well as 24-hour music television channels in Saudi Arabia, Lebanon and Dubai. The prince, who owns Rotana outright, said that the company would also be valued at more than US$1 billion. Prince Alwaleed, a nephew of King Fahd of Saudi Arabia has an investment portfolio that includes stakes in Citigroup, Apple Computer, Canary Wharf, Euro Disney and News Corporation. He is one of the largest investors in tourism in the Middle East, with assets including a stake in the Fairmont Palm Hotel in Dubai. He is also expanding the Mövenpick hotel chain, in which he has a 27% stake, in Saudi Arabia. In 2005, KHI revealed plans to buy or build at least 35 more hotels in Dubai, Egypt, Bahrain and other Arab countries over the next three years. It is also expanding into Africa and in May led the acquisition of five hotels and resorts in Kenya from Lonrho Africa, the last vestige of Tiny Rowland’s once-sprawling empire. The Kenyan properties include the 100-year-old Norfolk Hotel, once a regular haunt of Hugh Cholmondeley, the third Baron Delamere, who helped to establish Kenya’s reputation as a playground for privileged, decadent British expatriates. The other Kenyan assets acquired in a joint venture with Fairmont Hotels and Resorts of Canada comprise the Mara Safari Club, The Ark, the Aberdare Country Club and The Mount Kenya Safari Club. Fairmont, based in Toronto, holds roughly 15% of the joint venture and will manage the hotels, which will be renamed Fairmont Hotels. Meanwhile, Sandy Weill, the chairman of Citigroup is planning to launch his own US$5 billion private equity fund in association with Prince Alwaleed. Weill, who built Citigroup from nothing over four decades, is due to retire from the world’s biggest financial services company next April, but he has already started working on plans for the multibillion-dollar private equity fund. Prince Alwaleed, who is the biggest single investor in Citigroup, is also expected to be the biggest investor in the venture, with Citigroup also expected to join him. Rumours of the venture began to circulate on Wall Street as the stock market closed last Monday night. CNBC reported that Weill was preparing to step down imminently to launch the fund. Citigroup has denied any plans for Weill to retire early, but it declined to comment on the prospect of the banking group’s chairman setting up a private equity fund.

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