Four Seasons group seeks partner for Regent chain
Four Seasons Hotels, the Toronto owner of Hong Kong-based luxury hotel group Regent International, is seeking a major investor to buy a large stake in the company.
Its aim is to expand the portfolio of 10 deluxe properties, whose flagship is The Regent in Tsim Sha Tsui.
The five-star hotel group, which paid US$150 million for Regent Hotels and Resorts four years ago, made the surprise announcement in Canada last night.
It has hired the global investment firm Goldman Sachs to help evaluate and select a suitable, highly qualified strategic joint-venture partner.
Four Seasons chairman Isadore Sharp said the 1992 merger of the two hotel companies had created a powerful and successful global enterprise. Both had excellent opportunities for continued growth, he said.
In Hong Kong, the president of the Regent group, Wolf Hengst, said that taken together the two chains were undervalued. Separately, they would be worth a lot more. He said options for the right partner were fluid. There were several possibilities for a successful partnership.
Four Seasons, where Mr Hengst has a seat on the management committee, will consider a range of propositions, although the Canadian company will retain a significant stake in Regent.
It will continue operating existing Regent hotels and resorts from Hong Kong to Los Angeles and Sydney, with existing staff.
The joint-venture partner was likely to be asked to invest in a company valued at considerably more than Four Seasons paid in 1992, industry analysts said last night. Since the acquisition, the value of both hotel companies had grown.
Four Seasons would consider proposals from the right potential partner; it might want to buy 40 per cent of the company or 60 per cent, Mr Hengst said.
Mr Sharp said Regent's strong brand-name recognition and its strength in marketing, reservations and operations positioned it perfectly for aggressive growth.
Mr Hengst said that with a new strategic partner - which could be Asian, North American, European or Middle Eastern - Regent would be ready to grow outside the Asia-Pacific region. It would also give Four Seasons the opportunity for expansion in Asia.
'The deal will give Regent a tremendous opportunity for rapid growth,' Mr Hengst said. 'The number of properties could double in two or three years, given the right partner.' Founded in 1972 to operate luxury hotels around the Pacific Rim, Regent International was bought by Four Seasons 20 years later for US$150 million. The acquisition raised eyebrows in the international hotel industry, with many analysts querying how two operators of deluxe properties could co-operate and compete at the same time.
In hindsight, the deal has been a profitable one for Mr Sharp. Mr Hengst said Four Seasons had received excellent financial returns from its investment. In addition to the financial benefits, it was able to add highly praised properties in New York, Milan and Bali to the Four Seasons portfolio, opportunities it would not have had unless it controlled the Regent group.
