Ski area speculation

Ski Corp. officials say rumors of pending sale are false

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Officials of the Steamboat Ski and Resort Corp. say they are not aware of any pending sale of the ski area.

When asked Monday whether any negotiations were under way, Marketing Vice President Andy Wirth said, "We don't have any information on that."

Speculation about a possible sale of the ski area has circulated widely in the community during the past week. Wirth said he referred the question to Ski Corp. President Chris Diamond on Monday and that his response was similar.

Steamboat executives had contact during the weekend with top officials of the parent company -- American Skiing Co. -- based near Park City, Utah. President and CEO B.J. Fair, Chief Financial Officer Betsy Wallace and three members of the board of directors were in town for the auction of the remaining inventory at the Steamboat Grand Resort Hotel.

The auction has played a role in fueling speculation about Steamboat. However, Wirth rejected the logic that the timing of the auction could be tied to a pending sale. The Steamboat Grand is owned by Grand Summit Resort Properties, a separate division from the group of eight ski resorts owned by American Skiing Co.

"The only functional relationship between the Steamboat Ski and Resort Corp. and the hotel is that we have a management contract to run it," Wirth said.

Chicago businessman Nick Schoewe, who was part of the Triple Peaks Group that had a deal to buy the ski area four years ago, said he is not involved in any new efforts to acquire the ski area.

"I haven't heard anything about that," Schoewe said when asked whether he was part of a new consortium of Midwestern investors pursuing Steamboat.

Schoewe worked with lead investors Tim and Diane Mueller of Vermont on the 2002 deal, which fell apart at closing in late winter 2002. The price of the ski area and associated real estate at the time was $91.4 million.

American Skiing Co. is controlled by Texas-based private equity investment firm Oak Hill Capital Partners, which invested $150 million in the company in August 1999 and another $30 million in 2001. Oak Hill controls a majority of the stock shares in the company and appoints a majority of the members of the board of directors. Oak Hill typically invests in a company with the intent of improving its balance sheet and after holding it for a few years, selling it at a profit.

American Skiing Co. spokesman David Hirasawa said last week that it's no secret that Oak Hill might someday seek to sell American Skiing.

"It certainly wouldn't be a surprise if they acted on it," Hirasawa said. "I can't say whether or when they might (seek) a realization on their investment."

Wirth said Steamboat Ski and Resort Corp. executives are intent on the tasks at hand.

"We remain focused on two things," Wirth said. "First, we're working to finish the current ski season in the best possible manner and on executing our plan for fiscal 2006. Second, we're working on our capital budgets and our strategic plan for next year."

Rumors about a possible sale of Steamboat come against the backdrop of other changes in the ski industry.

Canada-based Intrawest an--nounced in February it would sell the majority of its 15 percent interest in California's largest ski area, Mammoth Mountain, for a net gain of $60 million. That news came less than two months after Starwood Capital Group Global LLC purchased a controlling interest in Mammoth from founder Dave McCoy for $365 million.

Intrawest officials, whose company owns Copper Moun-tain, once confirmed they had studied an acquisition of Steamboat but concluded there wasn't sufficient opportunity to pursue their specialty development of resort villages.

-- To reach Tom Ross call 871-4205 or e-mail tross@steamboatpilot.com

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