Vail to buy Canadian ski resort operator Whistler Blackcomb
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The Peak 2 Peak gondola passes between Whistler and Blackcomb mountains in Whistler, British Columbia December 11, 2008. REUTERS/Andy Clark
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By Arunima Banerjee and Amrutha Gayathri
(Reuters) - Vail Resorts Inc said it would buy Whistler Blackcomb Holdings Inc, operator of the ski resort that was a venue for the 2010 Olympic Winter Games, for about C$1.39 billion ($1.06 billion) to expand its mountain resort chain into Canada.
The deal will help bring more stability to Vail's weather-dependent business and boost its summer revenue.
It will also help Whistler draw more tourists with Vail's season pass, which allows pass-holders ski at Vail's resorts in the United States and Australia.
"In summer, Whistler is absolutely a leader in North America and we feel that adding that to Vail Resorts certainly helps our summer revenue and profitability," Vail Chief Executive Rob Katz told Reuters.
Katz said the acquisition will augment Vail's season pass program, which has about 500,000 holders and has been growing by about 15 percent annually in the last seven to eight years.
The C$36 per share cash-and-stock offer represents a premium of about 43 percent to Whistler's Friday close.
Whistler's shares jumped 47.6 percent to an all-time high of C$37.10, while Vail's shares rose 9.7 percent to a record high of $157.95.
Broomfield, Colorado-based Vail will pay about C$676 million in cash.
Vail's offer was unsolicited, Whistler CEO Dave Brownlie said on a conference call, adding that there were no other bidders.
Brownlie said the deal would help Whistler's growth plans, including a project that is aimed at insulating the company's year-round resort in British Columbia from daily changes in weather.
The project includes an indoor adventure center and a six-star luxury hotel.
Whistler's mountain resort - located on two side-by-side mountains connected by cable lift - is open for skiing from November through May.
A number of lifts, which take people up the hill, remain open from May through October for summer activities including hiking, glacier skiing and mountain biking.
Whistler's resort had about 2.7 million visitors in the year ended March 31.
Vail is planning to use a term loan, its credit facility and cash-on-hand to fund the acquisition.
The deal, expected to close in fall 2016, comes seven months after Vail bought the Wilmot mountain ski area in Wisconsin.
Greenhill & Co is the financial adviser to Whistler, and Osler, Hoskin & Harcourt LLP its legal counsel. Stikeman Elliott LLP and Gibson Dunn & Crutcher LLP are advising Vail.
($1 = 1.32 Canadian dollars)
(Reporting by Arunima Banerjee and Amrutha Gayathri in Bengaluru; Editing by Maju Samuel)
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