Aspen Skiing Co. owners scrambled for Intrawest deal after initial offer rejected
May 10, 2017
An affiliate of Aspen Skiing Co. had an offer to acquire part of Intrawest Resort Holdings rejected this winter but salvaged its position with a hasty marriage to a Denver equity firm, according to documents filed with the U.S. Securities and Exchange Commission.
Affiliates of Skico and KSL Capital Partners ultimately made the winning bid, but the deal was far from a sure thing over a tense couple of weeks of negotiations, according to a preliminary information statement filed on the proposed merger with SEC. The statement is designed to give shareholders of Intrawest stock a clear picture of how the merger unfolded.
The Crown family, owners of Aspen Skiing Co., initially wanted to cherry-pick portions of Intrawest. The Crowns made a non-binding offer to buy Steamboat and Winter Park ski areas along with Canadian Mountain Holidays heli-skiing business for between $941 million and $1.129 billion in cash, according to the document.
As an alternative, the Crowns were willing to pay between $732 million and $878 million in cash just for Steamboat and Winter Park.
Crown and Aspen that was not allowed to continue in the process because it was non-compliant in that it only expressed interest in the Company’s Steamboat, Winter Park and CMH businesses.
— statement filed with SEC
The Crowns were one of six parties that made preliminary indications of interest in a purchase, according to the statement, which was first reported by The Denver Post.
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Aspen Skico officials declined to comment Wednesday, saying they would let the document speak for itself.
The Crowns through their company, Henry Crown & Co., pursued the purchase, but the deal didn't fly with Intrawest's board of directors Feb. 16.
"The board authorized the company's financial advisers to inform Crown and Aspen that it was not allowed to continue in the process because it was non-compliant in that it only expressed interest in the company's Steamboat, Winter Park and CMH businesses," the statement said.
Meanwhile, KSL was one of only three parties invited by Intrawest to a "round two" of the bidding process.
KSL and Aspen Skiing Co. already had a business relationship, which greased the skids for a team effort to acquire Intrawest. Skico and KSL combined with a third company last year to acquire Snowmass Base Village. They have reignited the effort to complete the village, including Skico's Limelight Hotel in Snowmass.
KSL informed Intrawest on Feb. 22 it wanted to form a consortium with an affiliate of Skico to pursue the purchase. Intrawest gave its consent because the team "would likely be able to provide higher value for the company's stockholders," the statement said.
So, less than a week after being eliminated as a bidder, the Crowns were back in the running.
The Crowns and KSL formed Hawk Holding Co. to pursue the transaction. They were initially competing against two other potential bidders. The statement doesn't identify the other parties.
The group identified as "Party 2" dropped out of the process on March 3 "citing business complexity and competition from other operators in the ski industry," the statement said.
In following days, Party 1 fell out of the running but Party 3 resurrected a bid after forming a consortium.
The Aspen group scrambled to seal the deal March 29, offering Intrawest $23 per share of common stock as long as the deal was accepted by 5 p.m. March 31. Intrawest's board said no deal on March 30 and asked the Crowns and KSL to improve their offer.
But Intrawest learned March 31 that Party 3 couldn't raise the equity needed to buy the entire company and would require four to six weeks to secure the funds.
That triggered nine days of negotiations with the Aspen group, which resulted in a deal for $23.75 per share of common stock April 8. The mega-deal, worth about $1.5 billion, was announced April 10. It is supposed to be completed by the end of the third quarter of 2017.
The Crowns wanted Steamboat, Winter Park and the Canadian heli-ski operation. They also ended up with Mont Tremblant, Quebec; Blue Mountain, Ontario; Stratton Mountain, Vermont; and Snowshoe, West Virginia.