Vail Resorts might have interest, and the means, to buy Intrawest | AspenTimes.com
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Vail Resorts might have interest, and the means, to buy Intrawest

VAIL, Colo. – With Intrawest Holdings set for auction in February, some ski industry analysts see reasons to suspect that Vail Resorts might have interest in the sale.

Intrawest’s Whistler Blackcomb, British Columbia, with a combined 8,000-plus skiable acres between the two mountains, lays claim as the largest ski area in North America, while Vail comes in as the second-largest ski area, with 5,289 skiable acres. That alone could mean Vail Resorts’ executives have their sights set on buying Intrawest Holdings, which has defaulted on a $524 million payment on its $1.4 billion loan – that is, if Vail Resorts has the kind of money for such a deal.

“[Intrawest] is a very depressed company, struggling a great deal – the group with the money can have the greatest opportunity,” said Jerry Jones, a ski industry consultant and developer.

Vail Resorts’ spokeswoman Kelly Ladyga said the company has no comment on the subject of February’s Intrawest auction.

Private equity firm Fortress Investment Group LLC owns Intrawest, which put up more than $1 billion in debt as part of Fortress’ acquisition of the company in 2006. With real estate development a major player in Intrawest’s revenues, the downturn in business since 2006 is obvious.

Scott Bunce, chief executive officer of Epicenterspark Hospitality, a hotel and condo management company, pays attention to the lodging side of things within the ski industry. He suspects Vail Resorts’ interest in Whistler Blackcomb is there – it would be a good investment, he said.

“It’s all based on the price Vail Resorts can get it for,” Bunce said.

Whistler is Vail’s largest competitor, he said. If Vail Resorts controlled both resorts, it could manage the marketing messages of the two and use one to promote the other, Bunce said.

There’s also opportunity for cross-marketing, meaning Vail Resorts could market to its current real estate owners to convince them to buy in the Whistler market, as well.

Buying Intrawest wouldn’t just mean Vail Resorts acquires Whistler Blackcomb, though – Intrawest also owns Steamboat and operates Winter Park and owns other resorts in both Canada and the United States.

Jones thinks there would be antitrust issues with Winter Park, pointing out that Vail Resorts had to divest in Arapahoe Basin when the company went public because maintaining ownership would have constituted a monopoly on the Front Range market.

“I don’t think the Justice Department would even allow them to look at Winter Park,” Jones said.

The City of Denver owns Winter Park, however, while Intrawest operates it, so the antitrust issues aren’t entirely clear.

Jones said Intrawest’s hotel component, similar to Vail Resorts’ RockResorts hotel brand, fits very much into Vail Resorts’ business model – just one more reason Jones could envision a Vail Resorts interest in the February auction.

“There’s also the issue of money – (does Vail Resorts) have the money to go after Whistler and Blackcomb? I suspect that they do,” Jones said.

Intrawest has said it’s still in negotiations over its debt with its lenders and that a February auction would not affect the 2010 Winter Olympic Games, which have several events scheduled at Whistler.

lglendenning@vaildaily.com


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