Whistler Blackcomb is officially on the market for $12 a share.
A news release issued Nov. 2 stated that Whistler Blackcomb Holdings Inc. has filed a final prospectus for its initial public offering of 25 million common shares at a price of $12 a share. It will be listed as "WB" on the Toronto Stock Exchange (TSX) and start trading on Nov. 9.
The offering is expected to generate $300 million, money that will help pay down the debt Fortress Investment Group took on when it bought Whistler Blackcomb parent company Intrawest in 2006.
Under the terms of the prospectus, proceeds will be used to buy a 75 per cent interest in the partnerships that own the Whistler Blackcomb resort from Intrawest. Whistler Blackcomb Holdings Inc., the company that will own 75 per cent of Whistler Blackcomb, will be owned 66.1 per cent by public investors and 33.9 per cent by Fortress-controlled Intrawest.
Whistler Blackcomb Holdings is a subsidiary of Whistler Limited Partnership and Blackcomb Limited Partnership. Nippon Cable, a Japanese company, will own 25 per cent of each partnership.
The 66.1 per cent stake available to the public stake may have been purchased already.
Citing anonymous sources, Bloomberg reported Tuesday morning that 25 million shares of Whistler Blackcomb Holdings Inc. have been sold at a price of $12 a share. Investors are said to receive dividend yield of 8.1 per cent, according to those sources.
Underwriters including CIBC World Markets, RBC Dominion Securities and Scotia Capital Inc. have also been granted an over-allotment option to purchase an additional 3,750,000 common shares in Whistler Blackcomb Holdings Inc. from Intrawest ULC, an option that they can exercise for 30 days. Whistler Blackcomb Holdings will receive no proceeds from these shares.
Pat Kelly, the owner of the Whistler Real Estate Company, said in an interview with Pique that his broker called him on Tuesday morning to confirm he owned shares in Whistler Blackcomb Holdings. A longtime Whistler resident, he expressed interest in the company as soon as he heard it was going public.
He wouldn't confirm how much he bought, but he said it was more than 100 shares.
"I'm a proud shareholder," he said, adding that people who still want to buy into the company can do so in the secondary market.
"Phone your broker, say you'd like to buy shares in Whistler Blackcomb Holdings when it goes on to the public market," Kelly said. "You phone your broker, say I'd like to buy 100 shares in Whistler Blackcomb, can I get any? You can always buy shares if it's a publicly traded company."
The apparent sale comes after the share price dropped from a proposed $14 to $15 a share, according to a memo from BMO Nesbitt Burns. It was later reported that the stock would be offered at $12.50 to $13 per share with a 7.5 to 7.8 per cent yield.
The drop in share price came as no surprise for Jim McKaillip, a partner and analyst with the firm Initial Public Offerings, of Beverly Hills, California.
"Usually when an investment banker's taken a company public, they have a range and it's just an idea and it's subject to change based on market conditions," he said in an interview. "Like if they say they're thinking of doing the IPO between $10 and $12, and the market pulled back by 20 per cent, the price could drop by 20 per cent."
Tuesday's Bloomberg report that Fortress was successful in raising the $300 million it had sought came as a surprise to some.
Nathaniel Payne, a former analyst with CIBC World Markets and now a coordinator of finance and budgeting in the office of the vice-president, academic at Simon Fraser University, said in an interview last week that underwriters initially found about $100 million of institutional interest when they tried to sell the company to pension funds and other investors.
"There's not been a high private demand," he said. "The numbers ultimately don't lie at the end of the day. If you look at the revenue they've generated, with $220 million in 2009, they generate around $223 million the year before, $219 million the year before that.
"I would say in terms of that, you're dealing with basically an asset that, it's not really grown, you're not seeing massive sales increases."