Shares of Vail Resorts (MTN) rose almost 8 percent Monday after it agreed to buy Canadian resort operator Whistler Blackcomb (Toronto Stock Exchange: WB-CA) for about $1.1 billion.
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The friendly takeover announced this morning, August 8, is valued at $1.4 billion. “Quite frankly, Whisler Blackcomb has seen various ownership models over the years, and its always continued to be a leader in mountain resort innovation”.
Whistler CEO Dave Brownlie will remain in his role and said the deal will support the resort’s “ambitious growth plans”, the Post reported. The resort’s popularity, which grew following the 2010 Winter Olympics in Vancouver, helped push adjusted earnings before interest, tax, depreciation and amortization to a record in the fiscal second quarter, ended March 31.
Whistler has more annual snowfall and a longer season than many ski resorts in the U.S. It also owns the nearby Jackson Hole Golf and Tennis Club, rated by Golf Digest as Wyoming’s top course and among the top 100 public golf courses in the U.S. Whistler Blackcomb will be part of Vail Resorts’ Epic Pass program for the 2017-18 ski season. According to Browline, the deal would also increase the company’s financial strength, marketing exposure and guest relationships. The deal to buy the Canadian resort is expected to close before the end of calendar 2016. One of Whistler’s board members will join Vail Resorts’ board of directors, pending a nomination from the company.
Vail operates ski areas and mountain resort properties in five states and Australia and has long eyed an expansion into Canada.
“Whistler Blackcomb is one of the most iconic mountain resorts in the world with an incredible history, passionate employees and a strong community”, said Katz. Scotiabank raised their price objective on shares of Whistler Blackcomb Holdings from C$29.00 to C$30.00 and gave the company an “outperform” rating in a report on Wednesday, April 13th.
Whistler announced in April its plan for the Renaissance Project, a three-phase $345-million plan to make on-mountain improvements such as new chairlifts, upgraded base areas, snowmaking and terrain as well as new townhomes and weather-independent adventure and action-sports amenities. While Whistler Blackcomb isn’t immune to weather patterns, its environment is less variable than other destinations, Vail CEO Robert Katz said. The resort will offer its regular Whistler Blackbomb-only passes, and stay on the Mountain Collective Pass, as well.
The C$36 per share cash-and-stock offer represents a premium of about 43 percent to Whistler’s Friday close.
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Shares of Whistler Blackcomb jumped to a new all-time high when markets closed Monday, rising to C$36.63 per share in Toronto, up by $11.49. Whistler Blackcomb Holdings has a 12-month low of $19.95 and a 12-month high of $37.10.
