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Mammoth Mt. Ski Area Sold
Started by Kelly, Oct 06 2005 05:40 PM
4 replies to this topic
#2
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Posted 06 October 2005 - 07:55 PM
Mammoth Ski Resort to Be Sold in $356-Million Deal
By Louis Sahagun and Roger Vincent, Times Staff Writer
MAMMOTH LAKES, Calif. The storied Mammoth Mountain ski area today announced plans to sell a controlling interest of its sprawling holdings in the Eastern Sierra to a private investment firm led by luxury hotel mogul Barry S. Sternlicht.
The $356-million deal between Starwood Capital Group and the ski area points toward a more traditional corporate leadership and away from the unpolished and independent style of the resort's pioneering founder, Dave McCoy.
"Mammoth has phenomenal skiing but has never had the sex appeal of Vail or Aspen," said hotel industry analyst Bruce Baltin of PKF Consulting. "There's interest now in taking it more upscale."
Starwood will have the right to operate the 4,000 acres of ski areas at Mammoth and June mountains and do some development, but the land is still owned largely by the U.S. Forest Service.
The area is about 300 miles north of Los Angeles along U.S. 395.
The agreement, which was announced a month after McCoy's 90th birthday, will include 185 ski trails served by 35 lifts, a lodge, more than a dozen stores and dining venues, and about 30 acres of commercially zoned acreage in adjacent Mammoth Lakes.
"We are excited about the opportunity to work with Mammoth on their transformation into a world-class resort destination with a real estate component to match one of the continent's finest mountains," said Sternlicht.
Until May, Sternlicht, 45, served as chairman and chief executive of Starwood Hotels & Resorts Worldwide Inc., which grew under his leadership by building up such internationally recognized brands as Westin, Sheraton, "W", St. Regis, Luxury Collection and Four Points.
Sternlicht's reputation for being a tough, hands-on boss who enjoys rejuvenating dowdy lodging chains with Ralph Lauren-style d้cor prompted speculation over what will become of this venerable resort community, which remains a suburban hodge-podge of motels, strip malls, A-frames and parking lots.
"What is coming will be more upscale, but there is a certain charm to this old stuff," said Mammoth Lakes Mayor Rick Wood. "We're still not an over-hyped, glitzy area that appeals only to wealthy or sophisticated travelers."
Nonetheless, news of the impending sale sparked expectations of a real estate boom in the landlocked 4-square-mile community where average home prices already hover above $1 million.
"Everyone's been holding their breath over this for months," said Mammoth Lakes real estate agent Stacy Bardfield, a close friend of the McCoy family. "We expect things to go crazy around here: inventory is going to disappear, and our volume of calls is going to soar 10-fold for rentals and sales and overall interest."
The area was already moving upmarket. A new Craftsman-style hub of lodging, entertainment and shopping called the Village at Mammoth which was built by Canadian resort developer and operator Intrawest includes a gondola to shuttle people up and down the mountain. A 230-unit, $140-million Westin condominium/hotel in Mammoth Lakes is scheduled to open this year.
Greenwich, Conn.-based Starwood Capital is a real estate and investment private equity firm with more than $5 billion under management. Recent additions to its portfolio include the largest company in the United States specializing in the ownership and management of golf courses, and Groupe Tattinger, the world's sixth-largest champagne producer.
Sternlicht remains chairman emeritus of Starwood Hotels, which has 3.8-million loyalty program members many of them professionals with an average annual income of $110,000 and a penchant for luxury vacations.
Mammoth Mountain attracts 1.4 million visitors annually.
The sale announcement today marks the end of an era.
The resort started with McCoy, a snow surveyor for the Los Angeles Department of Water and Power. In 1937, he parked his Model A Ford on a slope where snow fell early and hard on Mammoth Mountain, jacked up the rear and tied one end of a rope to the back wheel and the other to a tree.
He charged 50 cents a person for what became the mountain's first rope tow.
There were only half a dozen people residing in Mammoth when McCoy bought a snowplow to allow year-round access.
Over the ensuing decades, McCoy and his staff launched the area's first water district, volunteer fire department, regional hospital, high school and college.
McCoy is on a first-name basis with his employees, and is beloved by local families who for decades have enjoyed a variety of special privileges, such as cut-rate lessons and skiing passes for children.
Every Friday night in winter, thousands of vehicles stream across the Mojave Desert to a region that for decades has offered what many consider the best skiing for Southern Californians. Mammoth gets up to 36,000 visitors on busy weekends.
By Louis Sahagun and Roger Vincent, Times Staff Writer
MAMMOTH LAKES, Calif. The storied Mammoth Mountain ski area today announced plans to sell a controlling interest of its sprawling holdings in the Eastern Sierra to a private investment firm led by luxury hotel mogul Barry S. Sternlicht.
The $356-million deal between Starwood Capital Group and the ski area points toward a more traditional corporate leadership and away from the unpolished and independent style of the resort's pioneering founder, Dave McCoy.
"Mammoth has phenomenal skiing but has never had the sex appeal of Vail or Aspen," said hotel industry analyst Bruce Baltin of PKF Consulting. "There's interest now in taking it more upscale."
Starwood will have the right to operate the 4,000 acres of ski areas at Mammoth and June mountains and do some development, but the land is still owned largely by the U.S. Forest Service.
The area is about 300 miles north of Los Angeles along U.S. 395.
The agreement, which was announced a month after McCoy's 90th birthday, will include 185 ski trails served by 35 lifts, a lodge, more than a dozen stores and dining venues, and about 30 acres of commercially zoned acreage in adjacent Mammoth Lakes.
"We are excited about the opportunity to work with Mammoth on their transformation into a world-class resort destination with a real estate component to match one of the continent's finest mountains," said Sternlicht.
Until May, Sternlicht, 45, served as chairman and chief executive of Starwood Hotels & Resorts Worldwide Inc., which grew under his leadership by building up such internationally recognized brands as Westin, Sheraton, "W", St. Regis, Luxury Collection and Four Points.
Sternlicht's reputation for being a tough, hands-on boss who enjoys rejuvenating dowdy lodging chains with Ralph Lauren-style d้cor prompted speculation over what will become of this venerable resort community, which remains a suburban hodge-podge of motels, strip malls, A-frames and parking lots.
"What is coming will be more upscale, but there is a certain charm to this old stuff," said Mammoth Lakes Mayor Rick Wood. "We're still not an over-hyped, glitzy area that appeals only to wealthy or sophisticated travelers."
Nonetheless, news of the impending sale sparked expectations of a real estate boom in the landlocked 4-square-mile community where average home prices already hover above $1 million.
"Everyone's been holding their breath over this for months," said Mammoth Lakes real estate agent Stacy Bardfield, a close friend of the McCoy family. "We expect things to go crazy around here: inventory is going to disappear, and our volume of calls is going to soar 10-fold for rentals and sales and overall interest."
The area was already moving upmarket. A new Craftsman-style hub of lodging, entertainment and shopping called the Village at Mammoth which was built by Canadian resort developer and operator Intrawest includes a gondola to shuttle people up and down the mountain. A 230-unit, $140-million Westin condominium/hotel in Mammoth Lakes is scheduled to open this year.
Greenwich, Conn.-based Starwood Capital is a real estate and investment private equity firm with more than $5 billion under management. Recent additions to its portfolio include the largest company in the United States specializing in the ownership and management of golf courses, and Groupe Tattinger, the world's sixth-largest champagne producer.
Sternlicht remains chairman emeritus of Starwood Hotels, which has 3.8-million loyalty program members many of them professionals with an average annual income of $110,000 and a penchant for luxury vacations.
Mammoth Mountain attracts 1.4 million visitors annually.
The sale announcement today marks the end of an era.
The resort started with McCoy, a snow surveyor for the Los Angeles Department of Water and Power. In 1937, he parked his Model A Ford on a slope where snow fell early and hard on Mammoth Mountain, jacked up the rear and tied one end of a rope to the back wheel and the other to a tree.
He charged 50 cents a person for what became the mountain's first rope tow.
There were only half a dozen people residing in Mammoth when McCoy bought a snowplow to allow year-round access.
Over the ensuing decades, McCoy and his staff launched the area's first water district, volunteer fire department, regional hospital, high school and college.
McCoy is on a first-name basis with his employees, and is beloved by local families who for decades have enjoyed a variety of special privileges, such as cut-rate lessons and skiing passes for children.
Every Friday night in winter, thousands of vehicles stream across the Mojave Desert to a region that for decades has offered what many consider the best skiing for Southern Californians. Mammoth gets up to 36,000 visitors on busy weekends.
#3
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Posted 06 October 2005 - 08:54 PM
Intrawest (majority shareholder of Mammoth) shareholder take on Mammoth sale.
http://www.canada.com/national/nationalpos...a5-28758b92d268
http://www.canada.com/national/nationalpos...a5-28758b92d268
www.ropetech.org
#4
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HI
- Interests:yo, my name is Christian, and I live in the San Francisco Bay Area (Berkeley ....sort of) skiing is what I do best, and I love the mountains. Of course I love skilifts too, which is why I'm here. I'd like to learn more about them and maybe work in the Ski industry later on in life.<br /><br />Let it snow.
Posted 06 October 2005 - 09:04 PM
I've been reading a lot of mammoth regulars' opinions about this on the mammoth forum, and what I've found is that their reaction to the sale of the mountain ranges from neutral to negative. I don't want to see Mammoth's airport get upgraded to commercial aircraft, but I'm sure this new investing company would love to see that happen. Its all a big zoo over there, and I just want to get up on the hill and ski.
<!--coloro:red--><span style="color:red"><!--/coloro-->-Christian<!--colorc--></span><!--/colorc-->
<a href="http://www.myspace.com/the_skiing_beast" target="_blank">http://www.myspace.com/the_skiing_beast</a>
<a href="http://www.myspace.com/the_skiing_beast" target="_blank">http://www.myspace.com/the_skiing_beast</a>
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Posted 06 October 2005 - 10:11 PM
Intrawest pushed for share buyback
Evaluating its options
Lori McLeod
Financial Post
October 6, 2005
The ink is fresh on the deal, but already Intrawest Corp. shareholders are pressing the company on what it will do with its share of the proceeds from the proposed sale of California's Mammoth Mountain ski resort.
Intrawest yesterday said it stands to receive pre-tax proceeds of US$166-million by selling off the bulk of its 59.5% stake in Mammoth to a unit of real-estate investment firm Starwood Capital Group Global LLC.
On a conference call yesterday, Stephanie Tran, an analyst for Pirate Capital LLC, pushed for a share buyback. "I'm wondering why you wouldn't consider a stock buyback," Ms. Tran said.
A Connecticut-based hedge fund, Pirate Capital is Intrawest's biggest shareholder and was believed in the market to be one of the shareholders putting pressure on Intrawest to give better disclosure to investors. According to an internal Pirate report, the hedge fund also believes there is hidden value in Intrawest's real estate that the market does not recognize.
In a news release, Intrawest said it would initially use the sale proceeds to pay down debt, but was evaluating all of its options. On a conference call yesterday morning, chief executive Joe Houssian didn't rule out a share buyback, but said Intrawest's board was assessing use of the sale funds and has the "luxury of time" to figure things out.
However, Pirate may not tolerate too long a wait. Bloomberg's most recent data show Pirate as having a 6.8% stake in Intrawest, which gives it the clout to request a special meeting if it ever wants to bring its suggestions for Intrawest before other shareholders. On the conference call, Ms. Tran also questioned management about its debt repayment plans, and the undisclosed value of some of its land and real estate holdings.
Intrawest recently released the proxy circular for its annual meeting. Absent from the circular was an expected shareholder resolution calling for better disclosure from Intrawest management about executive compensation. The resolution was withdrawn as Intrawest provided the disclosure.
Pirate did not propose the resolution but there were market rumours that a group of activist shareholders could form if management wasn't responsive.
It's likely Intrawest will consider a "modest share buyback ... since management is aware it would be well received by investors," according to Pacific International Securities analyst Sheila Broughton. She noted management has become "very responsive" to shareholders as of late.
Intrawest shares closed down US$1.01 to US$26.12 in New York yesterday, and down 63 cents to $31.14 in Toronto. The 52-week high is US$27.50 in New York.
The formal sale of Mammoth started in February, when founder Dave McCoy hired an adviser to consider options for the resort. Intrawest had right of first refusal to buy the rest of the resort, but chose to sell instead, although it is maintaining a 15% minority interest. The sale price for all of Mammoth values it at US$365-million including debt and excluding cash.
"There was lots of chatter" the valuation might be in the high US$400-millions, so the lower number might be behind a pullback in the stock, Ms. Broughton said. However, there's lots for investors to like about the structure of the deal, she added. It was a "great" decision to maintain a minority stake in the resort, since Intrawest is "now in the position of going along for the ride," as Mammoth grows.
Evaluating its options
Lori McLeod
Financial Post
October 6, 2005
The ink is fresh on the deal, but already Intrawest Corp. shareholders are pressing the company on what it will do with its share of the proceeds from the proposed sale of California's Mammoth Mountain ski resort.
Intrawest yesterday said it stands to receive pre-tax proceeds of US$166-million by selling off the bulk of its 59.5% stake in Mammoth to a unit of real-estate investment firm Starwood Capital Group Global LLC.
On a conference call yesterday, Stephanie Tran, an analyst for Pirate Capital LLC, pushed for a share buyback. "I'm wondering why you wouldn't consider a stock buyback," Ms. Tran said.
A Connecticut-based hedge fund, Pirate Capital is Intrawest's biggest shareholder and was believed in the market to be one of the shareholders putting pressure on Intrawest to give better disclosure to investors. According to an internal Pirate report, the hedge fund also believes there is hidden value in Intrawest's real estate that the market does not recognize.
In a news release, Intrawest said it would initially use the sale proceeds to pay down debt, but was evaluating all of its options. On a conference call yesterday morning, chief executive Joe Houssian didn't rule out a share buyback, but said Intrawest's board was assessing use of the sale funds and has the "luxury of time" to figure things out.
However, Pirate may not tolerate too long a wait. Bloomberg's most recent data show Pirate as having a 6.8% stake in Intrawest, which gives it the clout to request a special meeting if it ever wants to bring its suggestions for Intrawest before other shareholders. On the conference call, Ms. Tran also questioned management about its debt repayment plans, and the undisclosed value of some of its land and real estate holdings.
Intrawest recently released the proxy circular for its annual meeting. Absent from the circular was an expected shareholder resolution calling for better disclosure from Intrawest management about executive compensation. The resolution was withdrawn as Intrawest provided the disclosure.
Pirate did not propose the resolution but there were market rumours that a group of activist shareholders could form if management wasn't responsive.
It's likely Intrawest will consider a "modest share buyback ... since management is aware it would be well received by investors," according to Pacific International Securities analyst Sheila Broughton. She noted management has become "very responsive" to shareholders as of late.
Intrawest shares closed down US$1.01 to US$26.12 in New York yesterday, and down 63 cents to $31.14 in Toronto. The 52-week high is US$27.50 in New York.
The formal sale of Mammoth started in February, when founder Dave McCoy hired an adviser to consider options for the resort. Intrawest had right of first refusal to buy the rest of the resort, but chose to sell instead, although it is maintaining a 15% minority interest. The sale price for all of Mammoth values it at US$365-million including debt and excluding cash.
"There was lots of chatter" the valuation might be in the high US$400-millions, so the lower number might be behind a pullback in the stock, Ms. Broughton said. However, there's lots for investors to like about the structure of the deal, she added. It was a "great" decision to maintain a minority stake in the resort, since Intrawest is "now in the position of going along for the ride," as Mammoth grows.
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