Intrawest agrees to $2.8 billion buyout
August 11, 2006
NEW YORK The owner of the Mammoth, Stratton and Whistler ski resorts and developer of a new Base Village in Snowmass has agreed to be acquired by private equity firm Fortress Investment Group LLC for about $2.8 billion cash.The $35-per-share cash offer for Intrawest Corp. represents a 32 percent premium over the resort operators Thursday closing price of $26.51 on the New York Stock Exchange. The offer, announced today, also calls for Fortress to assume roughly $992 million in debt, according to an Intrawest spokesman. Intrawest shares surged $7.70, or 29 percent, to $34.21 in morning trading on the NYSE.In Colorado, Intrawest operates Winter Park and owns Copper Mountain ski resorts. It is also a partner with the Aspen Skiing Co. in the ongoing development of a new Base Village at Snowmass.Skico executives were told about the sale last night, according to David Perry, company senior vice president. He was hesistant to speculate on what it means for the Base Village project, in which Intrawest and the Skico have been equal partners.But, he also said: Base Village is a project thats well under way. No matter the ownership position, that project is going ahead. Its in progress.It has been no secret that Intrawest has been entertaining suitors, Perry added.In April, as Intrawest’s largest shareholder called for the development giant to sell the company to take advantage of the soaring worth of its vast real estate holdings, an Intrawest spokesman predicted the Snowmass project would not be affected.Michael O’Connor, Intrawest’s vice president of development, said his company and the Skico have put too much effort into bringing Base Village on board to let anything happen to the project.”I don’t see it changing,” he told The Aspen Times in an interview before the announcement. “With all this partnership has been through to get this project approved … there’s been too much heart and soul poured into this, not to mention finance. We are fully engaged and prepared to move forward, and I wouldn’t see it impacting this project at all.”The $400 million Base Village will bring 1 million square feet of development to Snowmass. Construction is expected to finish in 2012.The acquisition of Intrawest, whose properties also include a luxury safari operator Abercrombie & Kent and the Tremblant ski resort in Quebec, represents the latest takeout of a public company by a private equity firm.Over the past year, such buyout firms have acquired companies ranging from luxury retailer Neiman Marcus Group Inc. to hospital operator HCA Inc. Earlier this week, food service provider Aramark Corp. agreed to a $6.3 billion takeover by an investment group.Intrawest said the Fortress bid offers the best option for shareholders. The New York-based company hired investment bank Goldman Sachs to review its strategic options in February.Among other properties, Intrawest also owns Canadian Mountain Holidays, a heli-skiing operation, the Sandestin Golf and Beach Resort in Florida, and Club Intrawest, a private resort club network in North America.The acquisition requires the approval of regulators and two-thirds of votes cast by Intrawest shareholders. The deal has the backing of Intrawests board of directors and is expected to close in October, pending receipt of shareholder and court approval.Fortress, which manages about $23 billion in capital, has previously invested in Brookdale Living Communities Inc., an operator of senior independent living facilities, and Alterra Healthcare Corp., which has filed for bankruptcy protection. The company manages about $23 billion in capital.The Aspen Times contributed to this report.