Tuesday, December 19, 2006
Steamboat Springs As thousands of winter vacationers begin to pour into the Yampa Valley for the holidays, the Steamboat Ski Area remains the property of American Skiing Co.
ASC, which owns eight resorts, including Steamboat, announced in July it would retain investment banking company Bear Stearns to explore a sale of Steamboat. There has been wide speculation as the ski area has hosted different prospective buyers, but ASC officials have remained tight-lipped about any deals. Buyers rumored to be interested in Steamboat have run the gamut from Tim and Diane Mueller, who led an investment group that tried to buy the ski area in 2002, to the Walt Disney Co.
ASC officials consistently have refused to comment on the rumor mill, and Andy Wirth, marketing vice president for ASC's Western resorts, said again Monday that there was nothing new to report on the sale front.
B.J. Fair, ASC's chief executive officer, said in July that two years of strong performance by his company's resorts made this the right time to "drive the maximum value for the company's shareholders," by exploring a sale of Steamboat.
The marketing of ski areas often begins earlier in the spring to allow time to sign a contract and close a deal before the biggest portion of the winter cash begins to flow to a new owner.
The ski area opened Nov. 23 without news of a deal and now it is headed into the busy holiday season. Ski season jet flights began Thursday at Yampa Valley Regional Airport.
There have been indirect signs in two recent filings with the Securities and Exchange Commission that ASC is preparing for a change of ownership at Steamboat. The filings have to do with compensation agreements for executives and a restructuring of a particular kind of bonus.
Company spokesmen have insisted the filings are not related to the sale of Steamboat.
On Nov. 11, the Steamboat Pilot & Today reported that longtime Steamboat Ski and Resort Corp. President Chris Diamond had signed a new contract running through the end of July. In addition to setting Diamond's compensation at $284,313, the document specified that in exchange for giving up his participation in a company equity plan, Diamond would be paid a $400,000 to $725,000 bonus, depending upon the sale price of the Steamboat Ski Area.
Then, last Friday, ASC announced changes to an executive bonus plan in a filing with the SEC. The company's "phantom equity plan" was adjusted so that bonuses would only be paid out if $300 million in assets were sold. Most reports have pegged a sale price of Steamboat at less than $300 million.
In the past year, there have been two major transactions in the ski resort industry. In the first, British Columbia-based Intrawest Corp. sold an 85 percent interest in Mammoth Mountain Ski Area in California to Starwood Capital for $365 million. That deal last December, it is believed, helped convince ASC's board of directors that the timing was right to explore the sale of Steamboat.
Then in August, Fortress Investments Inc., a hedge fund and private equity investing firm, announced it would acquire the remaining assets of Intrawest. That deal closed in October and included $1.8 billion in cash and assumption of another $1 billion.
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