Prince Takes Bite of Apple

A billionaire Saudi Arabian prince who bought more than 5% of Apple Computer Inc. said Wednesday that he will talk to Apple management and Oracle Corp. Chairman Larry Ellison to see who has a better plan to revive the personal computer maker.

The $115-million investment, made in recent days by Prince Al-Waleed Bin Talal Al-Waleed, comes as Ellison ponders organizing a group to bid for the money-losing company.

The prince, who bought stakes in Citicorp and Euro Disney before their businesses picked up, said Apple has a strong brand name and a chance to return to its former glory.

“Things could be resurrected there and we could have the old Apple back,” Al-Waleed said. “I will listen to both sides; I need to see which one convinces me more.”

Apple, which pioneered windows and icon-based PCs, is struggling with declining sales, uncertainty about its software strategy and losses of nearly $1 billion for the last five quarters. Apple’s market share fell to 5.2% last year from 7.9% in 1995.

Ellison, who is acting independently of Oracle, said last week that he is soliciting comments on whether he should set up an investment group to purchase the company.

Al-Waleed, a nephew of Saudi Arabia’s King Fahd and one of the richest men in the world, called Ellison a good friend and said he will listen to what he has planned.

Al-Waleed also said he is in touch with Apple’s management and may accumulate more shares, depending on his discussions with Apple and Ellison.

“I’m going to keep all my options open,” Al-Waleed said. Apple declined to comment and Ellison couldn’t be reached.

Shares of Cupertino-based Apple rose 50 cents to close at $18 on Nasdaq.

“It’s good to see someone make a vote of confidence in the company,” said Tim Bajarin, an independent analyst with Creative Research Strategies.

Al-Waleed has 10 days to file with the Securities and Exchange Commission the specifics of how many shares he owns. He became Apple’s largest single shareholder, passing Mike Markkula, one of the first investors in Apple more than 15 years ago, who owns about 2.1%.

His interest in Apple is just the latest of his investments in troubled companies.

Trans World Airlines Inc. said last month that Al-Waleed bought 5% of its shares, expanding his worldwide holdings with a bet the struggling airline’s stock will prove a bargain.

“The prince has a very strong investment philosophy--he buys name brands when they are out of favor,” said Gary Kaminsky, managing director at Cowen & Co., which sold its Apple shares at the end of 1996.

Al-Waleed, while declining to criticize Apple Chairman Gilbert Amelio’s performance during the last year, said more needs to be done to save Apple. Amelio has unveiled two restructurings and plans to cut the work force 30%.

“I need to see a plan of how things will improve--a long-term plan,” Al-Waleed said. “We need to see a lot more” than what has been done so far.

Al-Waleed said he sees “serious potential for Apple to provide larger returns to its stockholders” and that Apple’s name recognition and 20 million loyal users are enough to help turn things around.

Al-Waleed’s other holdings include hotels, banks, broadcasters and retailers. He owns stakes in Saks Fifth Avenue and luxury hotels, including New York’s Plaza Hotel, San Francisco’s Fairmont Hotel, the Hotel George V in Paris and the Four Seasons Hotel Inc. chain.

In addition, he is a partner in pop star Michael Jackson’s Kingdom Entertainment venture.