Ski area deal still on track

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Chris Boyce of Distinctive Tent Rentals helps set up the Music Tent in the Gondola parking lot at the base of the Steamboat Ski Area on Wednesday. The tent will be the site of numerous concerts during the next couple of weeks.

— Because the deal to sell the Steamboat Ski Area won't close until late this winter, American Skiing Co. will keep most of the revenues from the 2006-07 ski season.

"We keep (all the revenues) up until closing," ASC spokesman Dave Hirasawa confirmed Tuesday.

Other aspects of the deal are spelled out in an ASC filing with the Securities and Exchange Commission.

The sale of the ski area to Vancouver, British Columbia-based Intrawest is expected to close on or before March 31. On Dec. 19, debt-ridden ASC announced it had entered into a "purchase agreement" to sell Steamboat Ski Area assets for $265 million in cash, with Intrawest assuming about $4 million in debt.

ASC plans to use the sale proceeds to pay off debt. Because ASC is a publicly traded company, it is required to make certain information public. The specific language of the purchase agreement has not been released, but Hirasawa said ASC would do so if legal counsel decided it was necessary.

According to the ASC filing with the SEC, the purchase agreement contains "customary covenants and agreements of the parties, including with respect to the operation of Steamboat's business in the ordinary course between signing and closing, public disclosure, employee matters, non-solicitation of employees and similar matters."

The filing also states the purchase price "is subject to certain customary adjustments, including certain working capital and earnings adjustments."

And two things must happen before the sale can be completed.

First, the U.S. Forest Service must approve the sale. A majority of the ski area is on land owned by the Forest Service, which leases the land to Steamboat Ski and Resort Corp.

A Forest Service official did not return calls Wednesday.

Second, the sale must be OK'd by the Federal Trade Commission and the Department of Justice. The Hart-Scott-Rodino Antitrust Improvements Act of 1976 requires that certain sales and mergers be reviewed by those agencies to ensure they do not violate U.S. antitrust laws.

"Those are the big approval steps," Hirasawa said, adding that ASC can extend the purchase agreement by 60 days beyond the March 31 deadline if the government agencies are still reviewing the sale.

The purchase agreement also can be terminated by "mutual agreement of the parties or by either party upon a breach that remains uncured for 30 days notice."

ASC came close to selling the Steamboat Ski Area in March 2002 for $91.4 million, but walked out at closing. The company instead sold the Heavenly Ski Resort near Lake Tahoe, Calif.

While that deal went sour, ASC's deal with Intrawest is still intact.

"Everything is progressing fine," Intrawest spokesman Ian Galbraith said.

Andy Wirth, vice president of sales and marketing for Ski Corp., described this as the due diligence period.

"There is a lot of work at the detail level that is taking place," Wirth said.

But Wirth stressed Ski Corp.'s focus still is on operating the ski area and generating revenue.

"We've just finished the busiest week in the resort's history," he said.

- To reach Matt Stensland, call 871-4210

or e-mail mstensland@steamboatpilot.com

Comments

dave mcirvin 7 years, 7 months ago

does that help explain such a weak fireworks display on new years eve?

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