Saudi prince takes 5% stake in ailing Apple

Saudi Arabia's Prince al-Waleed bin Talal, the billionaire mogul famed for putting his dollars in enterprises that are down but not out, stunned the computer world yesterday by revealing he had bought 5 per cent of Apple for $115m (pounds 70m).

The investment represents yet one more intriguing twist in the ceaselessly suspenseful saga of Apple Computer, the once-revered pioneer of the home PC that recently has been brought to its knees by Bill Gates' Microsoft.

It comes on the heels of the revelation last week that Ralph Ellison, the unpredictable chairman of Oracle Software, was considering building a coalition of investors to make a bid for control of Apple.

The news will also turn the spotlight once more on Prince al-Waleed and his investment activities. Only two weeks ago he caused similar astonishment by buying a 5 per cent stake in another Titan of American industry that has assuredly seen better days: Trans World Airlines.

The Prince, who is a nephew of King Fahd, controls from his Riyadh base an ever-expanding portfolio of investments that includes hotel chains, entertainment and broadcast empires and development properties. Also last month, he announced the acquisition of 5 per cent of Norwegian Cruise Lines. Earlier this year, he purchased the luxurious George V hotel in Paris.

Speculation will be fuelled on what his next target might be. There has been industry gossip for some weeks, for instance, that he might attempt a rescue of Fokker, the ailing Dutch plane maker.

The Prince's special hallmark, however, has been giving the benefit of the doubt to large businesses that have stumbled into trouble. Most spectacularly in that regard he made large investments at moments of critical difficulty in the Canary Wharf development in London's Docklands and in the Euro Disney theme park outside Paris.

His foray into Apple and the manoeuvrings of Mr Ellison may not be in conflict with one another. Mr Ellison has made plain that he is not interested in owning Apple outright but in building a controlling 51 per cent stake.

Wall Street would like nothing more than for Mr Ellison, or anyone for that matter, to succeed in buying Apple.

All the while, the news from Apple seems only to get worse. Its embattled chief executive of only 13 months, Gil Amelio, recently announced plans to lay off about 30 per cent of its remaining payroll - 4,000 workers - in an effort to restore profitability.

In the last five quarters, Apple has lost almost $1bn and is expected this month to report a further quarterly loss of about $700m. The rot set in as the company suffered a drastic erosion in its market share in the face of the combined juggernaut of Microsoft's operating software and Intel's chip technology.

"I have been following the technology industry for quite some time, and Apple in particular for a number of months," Prince al-Waleed said in brief statement yesterday.

"I believe there is serious potential for Apple to provide large returns to its stockholders once again, as it did in the past."

The Prince, whose grandfather was the founder of Saudi Arabia, Ibn Saud, said he was aware of the activities of Mr Ellison and he would "monitor events closely" to see what comes of them.

Mr Ellison has invited current Apple stockholders and other interested parties to offer their opinions on his takeover project by conversing directly with him via e-mail.

The wisdom, meanwhile, of the Prince's TWA investment has not yet become apparent. In the few days after acknowledging his 5 per cent stake into the airline, it has been hit by suggestions from its own firm of auditors that its future viability as a going concern must now be in question. On Tuesday, the carrier said it anticipated first-quarter losses that would "significantly exceed" those of a year ago.

Last year, the Prince also acted against the normally conservative traditions of the Saudi royal household by forming a joint venture with Michael Jackson to co-operate on concerts, films, television and fun parks.

Prince al-Waleed's shopping list

Mar 97 Buys 5 per cent stake in TWA for $14.3m

Buys 5 per cent stake in Norwegian Cruise Lines for $20m

Buys $500m complex to house a new Four Seasons Hotel in Riyadh

Buys six of Lonrho's American Princess Hotels for $560m

Jan 97 Buys Granada's Hotel George V in Paris for pounds 104m

Mar 96 Announces "family values" multimedia entertainment centre with Michael Jackson

Dec 95 Buys 50 per cent of the property housing London's Four Seasons Hotel for $50m

Oct 95 Takes 25 per cent stake in consortium buying Canary Wharf for pounds 700m

July 95 Buys 4.1 per cent of Silvio Berlusconi's TV empire in a $700m deal

Sep 94 Buys 25 per cent stake in Canadian hotel group Four Seasons for pounds 78m

July 94 Buys 50 per cent stake in San Francisco hotel chain Fairmount Hotel Management

June 94 Buys 20 per cent of Euro Disney for pounds 235m

1993 Takes 11 per cent stake in New York department stores group Saks Fifth Avenue

Apr 91 Acquires 15 per cent stake in Citicorp, the US bank, for $750m, which he reduces to 9.9 per cent, making $268m

Apr 88 Part of a consortium taking control of United Saudi Commercial Bank in Riyadh

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