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Intrawest shareholders say yes to $2.8 billion Fortress deal

Takeover could be finalized by end of the month



By Clare Ogilvie

Nearly 100 per cent of Intrawest shareholders have approved the sale of Whistler-Blackcomb’s parent to New York’s Fortress Investment Group LLC.

At a 22-minute meeting Tuesday 99.9 per cent of shareholders said yes to a deal that will pay them US$35 a share when it closes at the end of the month. That’s a 32-per cent premium over the stock price before the proposed sale was announced last month.

The closing of the transaction remains subject to court approval in Canada as well as satisfaction or waiver of other conditions specified in the Arrangement Agreement entered into on Aug. 10, 2006, including approval by the Ministry of Industry under the Investment Canada Act.

Subject to such regulatory approval being obtained, an application for final court approval is scheduled to be heard by the British Columbia Supreme Court on Oct. 24, 2006. If court approval is obtained and the other conditions to closing are satisfied or waived, the transaction is expected to close on Oct. 25, 2006, after which all Intrawest shareholders will be entitled to receive US$35 in cash for each Intrawest common share.

The $2.8 billion deal will result in some hefty payouts to top Intrawest officials, including chairman, CEO and director Joe Houssian, whose company holdings are valued at $126 million.

He founded Intrawest in 1976 as a residential/commercial real estate company and has guided its evolution into North America’s largest mountain resort operator. It has revenues of more than $1.6 billion.

Houssian has not commented on his future with the company under Fortress. However, Fortress has indicated it would keep Intrawest’s head office in Vancouver.

Hugh Smythe, president of mountain operations, stands to get $7.1 million in the deal.

Intrawest announced earlier this year that it was looking for ways to boost shareholder value after frequent complaints from its largest single shareholder — Connecticut based hedge fund Pirate Capital LLC — that the company’s value was too low because the financial structure was too complicated. Pirate supported the sale.