The Four Seasons (NYSE: FS) agreed to a buyout for $3.8 billion or $82 per share. The buyers include heavies like Bill Gates and Saudi Prince Alwaleed Bin Talal.

It's certainly a good deal for the company's CEO, Isadore Sharp, who will snag about $289 million.

However, investors thought there would a higher bid. Isn't this a prized asset? Aren't the industry fundamentals good?

Well, keep in mind that the Sharp family has a major stake in the Four Seasons. So why make the deal more expensive?

On the news, the stock price of Four Seasons fell $2.48 to $81.40.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

I've known for a while that Bill Gates makes his personal investments through Cascade Investments LLC., but his trading activities still remained elusive. No, you're not reading the writings of a stalker. I'm just nursing a healthy voyeuristic interest in how the extremely affluent will invest their assets. And they simply don't come along with more wealth than the Microsoft founder.

It's very true that you will become like the people you choose to surround yourself with. Having Warren Buffett as a friend must have influenced Bill's latest investment direction. Buffett has been investing in utilities for the past 5 years. The Washington Post reports that Cascade Investments LLC., Gate's personal investment vehicle, has been steadily buying up shares of PNM resources - a New Mexico utility company. They've formed a joint venture with hopes to accelerate the growth of operations while taking advantage of the deregulation of the utility industry.

Another Bill Gates investment also mentioned in the article has also seen some recent spotlight, Bill Gates is part of an ownership group that's looking to privatize the Four Seasons Hotel Inc. Bill Gates owns a substantial portion and the bidding party boasts notable partners such as Prince Alwaleed bin Talal.

Take a look at some of these names involved with Bill Gates: PNM Resources (NYSE:PNM), Pacific Ethanol (NASDAQ:PEIX), Canadian National Railway Co., Republic Services Inc. (NYSE:RSG), Grupo Televisa SA, Fisher Communications, Four Seasons Hotel Inc. (NYSE:FS), Otter Tail Corp.(NASDAQ:OTTR), Six Flags Inc. (NYSE:SIX). These are names that you simply don't hear on the lips of ordinary investors.

Besides, I'm sick of listening to news about XM Satellite (NASDAQ:XMSR) and Sirius (NASDAQ:SIRI) or Jim Cramer's lightning round picks. I'd rather stay away from those so called "hot" stocks and take a closer look at Bill's holdings. What's most interesting is his willingness to take a long-term stance with his ventures. It's making more and more sense why Buffett chose to give Bill his money.

U.S. stocks rallied today a head of tomorrow's elections on a variety of takeover bids and merger agreements. The mergers and acquisitions announcements created a bullish equity environment for traders and investors. The S&P 500 is up 1.14%, NASDAQ 100 is up 1.64%, The Dow is up .93% and the 10 year bond rate declined to 4.709%. The CBOE VIX was down .06 to 11.10.

McKesson (MCK) agreed to acquire Per-Se Tech (PSTI), an Atlanta based provider of financial and administrative technology products for hospitals for $28 per share in cash. McKesson's $1.8 billion buyout of PSTI is expected to close in the 1st quarter of 2007. Per-Se Tech option implied volatility collapsed to 20 from 37 on the announcement, according to Track Data.

Four Seasons Hotels (FS) received a $3.7 billion ($82 a share) buyout offer from Isadore Sharp, Cascade Investment (an entity owned by William Gates) and Kingdom Hotels (a trust owned by Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud). Four Seasons currently has 70 hotels in 31 countries. Four Seasons overall option-implied volatility collapsed to 15 from 32, indicating the confidence of this deal being completed.

KOS Pharma (KOSP) signed a definite agreement to be acquired by Abbott Labs (ABT) for $3.7 billion ($78 per share in cash). KOS Pharma develops pharmaceutical products for the treatment of cardiovascular and repository diseases. KOS Pharma option-implied volatility collapsed to 14 from 44 according to Track Data, suggesting the deal will be completed.

Swift Transportation (SWFT) confirmed it received a letter from Jerry Moyes, the largest shareholder, a current director and former chairman/CEO of the company. Moyes proposed to acquire all of SWFT's outstanding stock for $29 a share in cash. Swift Transportation overall option-implied volatility collapsed to 19 from 39 on the confidence the deal will be completed at a price higher than the $29 bid.

OSI Restaurant Partners (OSI) announced a definite agreement to be acquired by a group of investors lead by Bain Capital and company founders for $40. OSI over all option implied volatility collapsed to 14 from 32 on the confidence the deal will be completed.

PLAY, a developer of semiconductors, firmware and software platforms for portable media products, will be acquired Nivida (NVDA) for $13.50 in cash. PLAY option-implied volatility collapsed to 20 from 42 according to Track Data.

Option volume leaders today were Google, Inc. (GOOG), Citigroup, Inc. (C), TXU Corporation (TXU), the Home Depot, Inc. (HD) and Boston Scientific Corp. (BSX).

Options Update is provided by Paul Foster and TheFlyOnTheWall.com (subscription required).

Usually, when a company goes private, management uses cash from private equity firms. In the case of Four Seasons Hotels (NYSE: FS), management instead has turned to mega-rich investors, including Saudi Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud and Bill Gates (who has his own fund, Cascade Investment, LLC).

The price tag for the buyout is $3.7 billion, which means a very nice day for shareholders. This represents about a 28% premium from last Friday's closing price. It's also 21% above the stock's 52-week high.

The Four Seasons has the main ingredients for a deal: tremendous brand, good cash flow and choice real estate holdings around the globe.

The deal is also an indication that 'smart money' types see long-term opportunities in the hotel industry. So why not get a piece of the action?

The biggest winner, though, is CEO and Chairman of the Four Seasons, Isadore Sharp. He will get a severance payday of $288 million. Is it any wonder he wanted to do a deal?

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.

The luxury hotel business is highly sensitive to macroeconomic factors. Economic downturns and travel disruptions can seriously impair profits. Rising oil costs and political instability can also impede travel. But the world's most recognized great luxury hotel brand, Four Seasons Hotels (NYSE: FS) has protected itself wisely from the cyclical nature of the market, primarily because it doesn't own most of its 70 properties throughout 31 countries. Instead, it signs long term contracts (60-80 years on average) with hotel owners, putting the onus on the owners to pay for costly maintenance and renovation.

Four Seasons has maintained its brand identity better than any other hotelier out there. It refuses to lower its prices, even when the economy takes a downturn. Other hotels cut prices and downsize staff, and the brands suffer as a result. Not Four Seasons. Its average room revenue remains the highest in the business.

The company is expanding its brand name beyond lodging into resident ownership clubs and luxury residential developments -- perhaps having missed the height of the residential bull market.

Further, FS is active in pushing growth outside of the saturated US market. Four Seasons expects the number of properties under management to double over the next 10 years, and many of them are in the emerging and profitable Asian and Middle Eastern markets. So if the US economy takes a hit, FS has other markets to pick up the slack.

Type of stock: A luxury hotel chain with a stellar brand name that protects itself from the volatile market by managing, rather than owning, the majority of its 70 hotels, and continuing to push into emerging and profitable markets like Asia.

Price target: Trading at $64.49, Wall Street expects revenues to rise an average of 9.5% annually over the next five years. As Four Seasons moves further into the management, rather than ownership, business, operating margins will continue to rise. This is a winner at this price, and I'd hang on for the long term.

Hilary Kramer is a financial editor for AOL Money & Finance.