Swanky Bid for Four Seasons

Updated from 7:12 a.m. EST

The hotel sector took flight Monday after Four Seasons'(FS Quote) founder and chief executive offered to take the company private for $82 a share, representing a 28% premium to Friday's closing price.

Isadore Sharp, the company's CEO and controlling shareholder, is being backed in his bid by Kingdom Hotels International, a company owned by Saudi Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud, and Cascade Investment, an entity owned by Microsoft(MSFT Quote) founder Bill Gates.

Kingdom Hotels took Fairmont Hotels private earlier this year.

The lofty deal valuation for the posh chain sent other hotel stocks soaring. Orient-Express(OEH Quote), a luxury resort owner that has been mentioned as an attractive private equity buyout candidate, rose 6.8% to $39.94. Hilton(HLT Quote) rose 3.5% to $29.59, and Starwood(HOT Quote) rose 2.8% to $59.91.

The Four Seasons deal amounts to a P/E ratio of 44.4 times the company's estimated 2007 earnings per share and 31.9 times estimated 2007 earnings before interest taxes, depreciation and amortization, according to Deutsche Bank analyst Bill Lerner's estimates.

"These multiples are curiously strong -- particularly since there is virtually no underlying real estate -- and handily exceed the prior high-water mark for a going-private transaction in the hotel sector, which was set by Kingdom's acquisition of Fairmont in May '06," Lerner wrote in a research note Monday morning.