NEW YORK (Bloomberg) ? Saudi Prince Alwaleed bin Talal, the world's fifth-richest man, and Colony Capital LLC agreed to buy Fairmont Hotels & Resorts Inc. ? the owners of the Fairmont Southampton and the Fairmont Hamilton Princess ? for $3.9 billion to gain 87 luxury hotels, thwarting any bid from billionaire Carl Icahn.

Alwaleed's Kingdom Hotels International and Colony Capital, a Los Angeles-based real estate investment firm, will pay $45 a share for Toronto-based Fairmont, the companies said today in a PRNewswire statement.

Thomas Barrack, chief executive officer of Colony, has spent more than $12 billion since 1991 buying lodging assets. The deal announced today will give Alwaleed a stake in a group of 33 Raffles hotels that Colony bought last year, including the 119-year-old Raffles Hotel in Singapore. Fairmont already manages hotels owned by Alwaleed, such as the Savoy in London.

"Fairmont and Raffles are an excellent strategic fit," Alwaleed said in the statement. "Joining the two luxury companies creates an ideal platform for continued international expansion."

The total value of the deal, including the Raffles hotels and debt, is $5.5 billion, the companies said.

Fairmont has struggled in the past year as a rising Canadian dollar slowed American travel to Canada, where the company manages or franchises 59 hotels.

It also owns hotels in places such as Acapulco in Mexico, Bermuda and Barbados and manages them in cities such as Washington, Seattle and Monte Carlo.

Today's bid is 13 percent more than Icahn's $40 a share offer on December 2 to buy 41 percent of the company, to add to the 9.3 percent he already owned. Fairmont reiterated its opposition to Icahn's bid, which was worth $1.19 billion. Icahn has previously said he's willing to increase his offer provided he is allowed to examine Fairmont's finances.

Icahn raised $1.6 billion for two hedge funds last year to pursue what he terms "activist" investing, or pressing under-performing companies to increase their stock prices. He earlier said Fairmont should be sold to a larger hotel company to take advantage of "economies of scale."

Fairmont's history dates to 1886 when William Van Horne built the first Canadian Pacific Hotel, called Mount Stephen House in the Rocky Mountains. Van Horne's strategy was to build luxury hotels along the Canadian Pacific railway line that was stretching across Canada. Canadian Pacific bought the Fairmont Hotel chain in 1999 and spun off the combined chain two years later.

The company sold a Hawaii hotel last month for $250 million. The pressure from Icahn could speed the company's asset sales, Merrill Lynch & Co. analyst David Anders wrote in a research note on December 27. He's based in New York and rates the stock "neutral."

Barrack's purchases included buying the Savoy in 1998, along with other London hotels including Claridge's, the Berkeley and the Connaught.

Colony sold the four hotels to a group of private Irish investors for 750 million pounds ($1.3 billion) in 2004. They in turn sold the Savoy to Alwaleed a year ago for an undisclosed amount.

Shares of Fairmont rose 27 cents to C$50.44 in Toronto Stock Exchange trading on Jan. 27.

Alwaleed already owns 5.4 percent of Fairmont, according to the statement. Fairmont shareholders will be asked to approve the transaction at a meeting in April. It will need 66.6 percent approval to proceed.