Vail Resorts Pumps Up The Canyons Offer
SAM Magazine-The Canyons, Ut., Sept. 12, 2007-In the latest twist to The Canyons saga, Vail Resorts (VR) has sweetened its offer offer for The Canyons. VR offered an additional 30 percent of the net cash flow that VR makes off any real estate it would get in the deal. According to VR CEO Rob Katz, this could result in earnings of up to $650 million through 2020 for American Skiing Company (ASC) or its successors.
ASC rejected a $95 million bid by VR for The Canyons on July 16, in part because ASC believed that Vail had reached an agreement with a third party regarding the potential purchase of the Canyons without disclosing that agreement to ASC. Such an agreement would have been in violation of a confidentiality agreement signed by VR.
Currently, ASC is attempting to finalize the sale of The Canyons to Talisker Corp. for $100 million. The sale is currently on hold due to a lawsuit filed by VR. A Colorado court is expected to rule on the merits of the suit by October 1. VR claims ASC failed to consider the merits of the VR's initial offer. Vail then also upped its bid to $110 million. ASC replied that no sale agreement ever existed with VR.
The latest offer by VR suggests that Katz and other VR executives are determined to gain control of The Canyons and the highly lucrative real estate surrounding the Utah ski resort. According to sources, Katz is arguing that Talisker has "has never operated a ski resort" and that Vail is the "premier mountain resort operator in the world."