Intrawest, parent company of Whistler-Blackcomb, will be acquired by New York-based Fortress Investment Group LLC for $2.8 billion US.
The announcement made by Intrawest and Fortress this morning provided an immediate boost to Intrawest stock prices, which rose $8.55 to $38.34 CDN in morning trading on the Toronto Stock Exchange.
The agreement, which must be approved by two-thirds of voters at an Intrawest shareholders meeting in October, will see Fortress acquire all of Intrawest’s outstanding common shares at a price of $35 US per share. The all-cash transaction represents a 20 per cent premium over Intrawest’s closing price on Feb. 27, the last trading day before the company announced its intention to review its strategic options.
Fortress is a global investment and asset management firm with approximately $23 billion in equity capital under management.
The Intrawest board has unanimously recommended that shareholders approve the deal.
"I am pleased with the result of our review of strategic alternatives that was announced on Feb. 28, 2006," said Joe Houssian, chairman and chief executive officer of Vancouver-based Intrawest. "Over the past five months, we have thoroughly analyzed the financial and strategic options for the company and believe that the value inherent in this transaction is in the best interests of all of our shareholders. Fortress was attracted by our assets, people, business strategies and loyal customer base and is able to support Intrawest becoming a global leader across all of our businesses."
"Fortress has a disciplined strategy of acquiring asset-based businesses with high quality platforms and Intrawest is truly unique in this regard," said Wesley R. Edens, principal and chairman of the management committee of Fortress Investment Group LLC. "We have a great opportunity to continue Intrawest's evolution into a leading global leisure player and look forward to working with its management team, employees and partners."
More than 100 interested parties from around the world expressed interest in Intrawest following the February announcement of a strategic review. Serious negotiations with about 15 firms took place before Fortress emerged as the most attractive bid.
Whistler-Blackcomb senior staff members were on a conference call with Intrawest this morning prior to commenting.
Houssian told Canadian Press: "We have not had detailed discussions with Fortress about their more detailed strategic objectives other than they liked what they saw at Intrawest obviously and they're wanting us to grow the business."
The Canadian Press story also reported that the deal includes a $60 million US breakup fee.
Intrawest has interests in 10 mountain resorts across North America including Whistler-Blackcomb, Mont Tremblant, Stratton and Copper Mountain. The company operates ski areas and is the leading developer of mountain resort villages. Intrawest also develops real estate at other resort locations across North America and Europe.
The company also owns Canadian Mountain Holidays, the largest heli-skiing operation in the world, and an interest in Abercrombie & Kent, a world leader in luxury adventure travel. The Intrawest network also includes Sandestin Golf and Beach Resort in Florida and Club Intrawest, a private resort club with nine locations throughout North America.