Prem Watsa in Line for Majority Stake in Kennedy Wilson

Beverly Hills-based real estate investment firm Kennedy Wilson plans to go private in a $1.7 billion deal led by Fairfax Financial Holdings Limited senior management.

The all-cash deal is expected to give Toronto-based Fairfax Financial a majority interest in the publicly traded firm, CRE Connect reported.

Kennedy Wilson CEO William McMorrow and senior executives are expected to remain in charge of operations under the ownership of Canadian billionaire Prem Watsa, Reuters reported.

Watsa is known as the “Canadian Warren Buffett” for his varied investments through Fairfax Financial.

The deal calls for a price of $10.90 per share of Kennedy Wilson stock, a premium of nearly 50 percent at the time it was disclosed. Kennedy Wilson’s market cap is current at around $1.4 billion, with the market value higher based on any debt that’s part of the deal. The market has generally sent shares up so far in trading today.

The acquirer and seller on this deal have been familiar with each other for at least several years — Fairfax Financial replaced Kennedy Wilson as the buyer of $2 billion loan portfolio of Pacific Western Bank when it hit distress over capital outflows during a bout of tumult among regional banks in 2023.

Kennedy Wilson, whose Los Angeles properties include The Chadwick apartment building in Koreatown and Esprit Marina del Rey Apartments in Marina del Rey, has been busy on several fronts since facing some potential distress of its own in the Bay Area’s office market as recently as August. It made a big national move a month later, paying $374 million for the multifamily interests of Toll Brothers, getting 18 apartment and student housing properties and the Fort Washington, Pennsylvania-based homebuilders’ in-house development team. The brought Kennedy Wilson $2.2 billion of assets under management tied to those holdings and another $3 billion worth of assets under management in 20 multifamily assets it will oversee on Toll’s behalf. Kennedy Wilson also got 29 development sites across the country.

Kennedy Wilson’s McMorrow is included in The Real Deal’s upcoming Top 100 list of influential real estate industry figures in Los Angeles.

— Jerry Sullivan