Vermonters, by nature, generally play their cards pretty close to their vest. They’re usually not given to loud guffaws and back-slapping, nor other signs of extroversion. Calvin Coolidge wasn’t dubbed “Silent Cal” for nothing (approached by a man who said he had bet a friend he could get the President to say three words, Coolidge looked at him and noted, “You lose”) and his tight-lipped demeanor has been taken by many to characterize most Vermont residents even today.
For that reason, perhaps it’s understandable that Stig Albertsson, the highly astute businessman who has helped engineer the resurrection of Bromley since he bought it in 1971, may have misread the largely local stockholder makeup at Okemo Mountain, about 25 miles up the road from Bromley and overlooking the central Vermont mill town of Ludlow.
In the mid-1950s, residents of the Black River Valley town banded together to buy shares in the community-oriented ski area being constructed on Okemo, which is part of a state forest of the same name. The list of shareholders has grown well beyond the original “townie” list with the 600 persons who hold the current 23,901 shares living primarily throughout the Northeast.
However, a strong local flavor still exists at Okemo and observers credited that local voting bloc with helping resist a bid by Bromley to take controlling interest in Okemo. The vote during the Aug. 6 annual stockholder meeting was the largest in Okemo history; the final tally showed 12,148 proxies for the Okemo slate of directors and 9,425 for Bromley.
The story begins in May, when Bromley announced a tender offer of $32.50 per share for Okemo stock. Three Okemo directors had joined Bromley President Stig Albertsson in the takeover try; the three directors plus a fourth shareholder gave Bromley 18% of the outstanding shares and Albertsson hoped to buy another 33% to take control of the area.
The Okemo hierarchy, however, turned thumbs down on the original proposal, sending a letter to stockholders urging them not to sell because the offer was too low and Albertsson would gain control of the mountain for $360,000. John C. Zimmerman, president of the area, also noted Bromley was a smaller area than Okemo and although Bromley’s sales were twice that of Okemo, Okemo had a better profit picture and Bromley had not paid a dividend since Albertsson bought the area. Nor did Albertsson plan to declare a dividend if he succeeded in assuming control at Okemo, he wrote.
Albertsson upped his bid to $41 and extended his original deadline from mid-June to Aug. 16, a full 10 days after the stockholder meeting. He subsequently made a proposal to directors—the two earlier offers had gone directly to the shareholders—to buy 16,000 authorized but unissued shares of stock for $520,000; he also repeated his improvement plans including increased real estate development and a Master Plan by next March 31. The proposal further included a tender offer of $50 per share with a 10-year debenture; several season pass provisions; and board membership by at least two Ludlow residents and a third member from within a 20-mile radius of Okemo.
Bromley also had offered to complete a $1.5 million improvement program which included replacing two of Okemo’s six pomas with chairlifts and expanding the base lodge. Albertsson said consolidation of the two areas’ operations would benefit both, enabling them to spread maintenance and operation costs over a second area.
As the directors were expected to meet on Albertsson’s third offer, Roy Cohen of Sugarbush Valley—about 65 miles north of Okemo on famed Route 100—jumped into the bidding. He said he was prepared to top Bromley’s offer but after looking at Okemo’s books, he pulled out and said he wanted to spend more time considering the situation.
When the stockholder meeting began Aug. 6 in the base lodge, Bromley challenged the meeting, calling for an adjournment until it had been able to check all proxies; it claimed Okemo had denied Bromley access to the proxies and stock transfer ledger until just before the meeting and there had not been enough time to complete the study of proxies. The motion was denied, Bromley subsequently was ruled out of order and the meeting continued.
After the meeting, Albertsson said he wanted to complete a review of the proxies before determining his next step but, in the absence of a basis for a legal challenge, he “probably” would discontinue his takeover bid. He also ruled out a move against some other area, noting, “We have other things to do.”
Also after the stockholder meeting, Roy Cohen of Sugarbush told SAM he would meet with Okemo officials within the next month to take another look at the books and scratch a little deeper beneath the surface of the area. “As a businessman, I’ve got to find out about every business opportunity and Okemo certainly is a prime opportunity,” he said.
John C. Zimmerman, president of Okemo, said there was no litigation pending against Bromley despite a couple of legal challenges early in the maneuvering. The only suit still pending, he said, was a civil suit brought by David Rock, a director and former general manager, against Bromley and the three directors who sided with Bromley; he alleges they did not fulfill their duties as directors by allying themselves with Bromley.
Rock’s suit will stay on the court docket, he told SAM, “until we see what happens. It’s a demurring action and it’s not due for three or four months, so we’ll see how things develop…and if nothing goes wrong, I may withdraw it.”
One touch of irony overshadowed the drama. Two years ago, Zimmerman and others—including the directors who joined Albertsson in the takeover bid—pulled off a palace revolt by ousting the existing board of directors. Calling themselves the “Friends of Okemo,” they pledged improvements and outlined a five-year plan.
In 1977, everyone was on the outside looking in and then—after the old board’s ouster—they were on the inside, looking out. Within two years, there was Albertsson’s challenge…but this time the “ins” stayed “in.”
The Okemo’s Figures
Okem’s total revenues for the year ending April 30, 1979 were $2.2 million, including $479,000 from townhouse sales; earnings dropped from $207,057 on revenues of $1.88 million the previous year to $10,957 but a depreciation and amortization of $228,139 gave Okemo a positive cash flow of $239,096—more than the target of $200,000 shown in its five-year plan.
