June 21 (Bloomberg) -- Oracle Corp. Chief Executive Officer Larry Ellison has agreed to buy 98 percent of the Hawaiian island of Lanai, according to the current landowner and the state’s governor.
“It is my understanding that Mr. Ellison has had a long-standing interest in Lanai,” Governor Neil Abercrombie said in a statement. “His passion for nature, particularly the ocean, is well known specifically in the realm of America’s Cup sailing.”
Lanai, Hawaii’s sixth-largest island with an area of 141 square miles (365 square kilometers), is owned and developed by billionaire David Murdock’s Castle & Cooke Inc. since 1985. Ellison’s software industry rival Bill Gates married his wife Melinda on the island in 1994.
The sale includes two resort hotels, two championship golf courses and club houses, more than 88,000 acres of land including a 600-acre residential development, a solar farm, parks and utilities, according to an application filed by Castle & Cooke with Hawaii’s Public Utilities Commission requesting interim approval for the sale by June 26 so it can close the transaction the following day.
No price was disclosed. The transaction is valued in the “hundreds of millions of dollars,” according to the application to the commission. In a statement, Murdock, 89, said he would keep his home on the island and retain rights to develop a wind energy farm there.
“I believe that Larry Ellison will bring a new and fresh perspective to the island and its people,” Murdock said. “As a property owner on Lanai, I will continue to be a member of the community and will be looking forward to its future.”
Ellison is the world’s sixth-richest man, with an estimated net worth of $36.4 billion, according to the Bloomberg Billionaires Index. Gates is the second-richest man with a fortune of $62 billion.
Deborah Hellinger, an Oracle spokeswoman, didn’t immediately respond to a request for comment.
The island has 47 miles of coastline and is accessible from neighboring islands by helicopter and small planes. It has no stoplights and 93 percent of the 430 miles of roads are unpaved. More than 3,200 residents live there and about 26,000 tourists visited the island in the first quarter of this year, according to the state.
The sale creates “an extraordinary opportunity for the people and Island of Lanai to bring in new investment to the island of Lanai that should result in the creation of new jobs, provide local economic stimulus and reinvigorate the local tourism industry,” the application said.
The state Public Utilities Commission must approve the transfer of three utilities that are part of the sale, said Sean Mikell, a researcher for the commission.
The transfer requires consent from two of the three commissioners. The panel will look at “whether the transfer is reasonable and consistent with the public interest,” Mikell said. Two of the three commissioners were appointed by Abercrombie, while the term of the third expires at the end of June and will be replaced by an Abercrombie appointee.
A vote for interim authority is expected before June 26, and a final vote hasn’t been scheduled, Mikell said.
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