William Fatt, 54, is worth watching to see if the hotelier can placate a U.S. corporate raider intent on flipping his company, Fairmont Hotels & Resorts Inc., at a time when raiders and hedge funds have an unprecedented number of North American firms in their sights.
Fatt doesn’t conform to the stereotype of raider’s victim, an incompetent CEO with a bullseye on his back. His merger of the old CP chain of historic Canadian railway hotels with the smaller but prestigious Fairmont chain of five-star U.S. hotels made Toronto home base to the world’s two leading luxury hotel operators. (The other is Four Seasons Hotels Inc.)
It’s not that Fatt’s acumen fails to impress U.S. raider Carl Icahn, who accumulated a 9.3 per cent stake in Fairmont last year and is threatening to spend as much as $3.2 billion (U.S.) to acquire the hotelier outright and commence a search for buyers willing to take the firm off his hands at a higher price, whole or in pieces.
Fairmont’s collection of 88 hotels in eight countries belies Fatt’s cautious empire building. Lately, he’s been selling rather than buying assets in a red-hot real estate market that values hotels above office and commercial properties, using the proceeds to buy back Fairmont shares. Fatt has kept Fairmont’s debt low, and has more cash than he needs to finance operations.
