Intrawest agrees to $1.8 billion buyout by Fortress Investment Group

Intrawest agrees to $1.8 billion buyout by Fortress Investment Group{mosimage}NEW YORK — The owner of the Mammoth, Stratton and Whistler ski resorts has agreed to be acquired by private equity firm Fortress Investment Group LLC for about $1.81 billion (€1.42 billion) cash.

The acquisition on Friday of Intrawest Corp., whose properties also include luxury safari operator Abercrombie & Kent and the Tremblant ski resort in Quebec, is the biggest-ever buyout of a publicly traded resort operator, and the third-largest private equity acquisition of a Canadian company.

The $35-per-share cash offer represents a 32 percent premium over Intrawest's Thursday closing price. The offer also calls for Fortress to assume roughly $992 million (€776.5 million) in debt, according to an Intrawest spokesman.

Intrawest shares surged $7.68, or 29 percent, to $34.19 in afternoon trading on the New York Stock Exchange.

An analyst with Intrawest's largest holder, Pirate Capital LLC, called the $35 bid ''a great price'' and said the hedge fund would support the deal. Pirate began buying shares about 18 months ago and had pressed Intrawest to boost returns.

''With the real estate headwinds and consumer sentiment wavering, it's hard for public shareholders to value the company as it should be valued,'' Stephanie Tran said, adding that investors had not fully valued the company's real estate holdings.
''It's obvious it ought to be a private company,'' she said.

The Vancouver, British Columbia-based company hired investment bank Goldman Sachs in February to review its strategic options.

The Intrawest deal also represents the latest acquisition by private equity firms, which have been actively snapping up a variety of publicly traded firms in recent months. Over the past year, such buyout firms have acquired companies ranging from luxury retailer Neiman Marcus Group Inc. to hospital operator HCA Inc. Earlier this week, food-service provider Aramark Corp. agreed to a $6.3 billion (€4.9 billion) takeover by an investment group.

''We set out about a year ago to start the process for figuring out what's the best financial structure for the company to achieve maximum shareholder value,'' Joe Houssian, Intrawest's chairman, president and chief executive, said in a telephone interview.

He said the company had received about 100 inquiries and dealt ''with 15 of them in some level'' before deciding to accept the Fortress bid ''as the best transaction to generate shareholder value.''

Among other properties, Intrawest owns Canadian Mountain Holidays, a heli-skiing operation, the Sandestin Golf and Beach Resort in Florida, and Club Intrawest, a private resort club network in North America. It also owns ski properties in Colorado, West Virginia and Vermont.

Fortress sees the company's diverse leisure properties as growth opportunities and will pursue new growth initiatives, he said.

''I think the company's growth strategy and Fortress' view of the company are very much in alignment.''

The acquisition requires the approval of regulators and two-thirds of votes cast by Intrawest shareholders. The deal has the backing of Intrawest's board of directors and is expected to close in October, pending receipt of shareholder and court approval.

Houssian, who founded Intrawest in 1976, declined to comment on his role at the company ahead of a shareholder vote scheduled for October.

Talks about the future of Intrawest's 24,800 employees once the company goes private are expected to start soon, Houssian said.

Fortress has previously invested in Brookdale Living Communities Inc., an operator of senior independent living facilities, and Alterra Healthcare Corp., which has filed for bankruptcy protection.
The company manages about $23 billion (€18 billion) in capital.

— The Associated Press