Vail Resorts ups offer for Canyons
September 12, 2007
VAIL ” Envisioning billions in real-estate profits, Vail Resorts has upped its offer for The Canyons, the Utah ski resort it wants to buy.
In a letter filed with the Securities and Exchange Commission on Monday, Vail Resorts Chief Executive Officer Rob Katz offered the promise of more cash to the American Skiing Company, the current owner of The Canyons.
Katz said Vail Resorts would chip in 30 percent of the net cash flow that VR makes off the real estate it would get in the deal. That could mean $650 million through 2020 for American Skiing Company, Katz said.
In the letter, Katz said Vail Resorts can make $2 billion to $2.5 billion in real estate through 2020 at The Canyons.
The 3,700-acre Canyons, in Park City, is the biggest ski mountain in Utah, with 17 lifts and 152 trails. In comparison, Vail Mountain has 5,289 acres within its boundaries, with 32 lifts and 193 trails.
Getting the most profit out of the real estate at The Canyons will require upgrades in snowmaking, lifts and other “mountain infrastructure,” Katz said.
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Vail Resorts has already offered $110 million to American Skiing Company for the resort. That offer follows an agreement between American Skiing Company and Toronto-based Talisker Corp. for the sale of The Canyons, in which Talisker offered $100 million.
Vail Resorts is suing Talisker, American Skiing Company and another company, Peninsula Advisors, to stop the sale of The Canyons.
In July, Katz said Vail Resorts and American Skiing Company were on the brink of a deal when it fell apart.
Katz’s latest letter casts doubt on whether Talisker would get the needed approval from Wolf Mountain Resorts, the company that owns most of the Canyons land and leases it to the ski operator.
“Talisker has never operated a ski resort,” Katz wrote, adding that Vail is the “premier mountain resort operator in the world.”
Meanwhile, American Skiing Company has sued Wolf Mountain Resorts, saying it shouldn’t be allowed to block the sale of The Canyons to Talisker Corp, the Park Record of Park City reported Friday.
Cash-strapped American Skiing Company has been selling off its resorts to satisfy debts. It has recently sold Steamboat, Killington, Pico, Mount Snow, Attitash, Sunday River and Sugarloaf/USA. The company has begun the process of dissolving.
Its shares were trading for 4.5 cents each on Tuesday.
Broomfield-based Vail Resorts owns Vail, Beaver Creek, Breckenridge, Keystone and Heavenly, which it bought from American Skiing Co. in 2002.