Whistler Blackcomb: The triple that Bay Street almost couldn’t sell Republish
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 CNW Group/Whistler BlackcombA snow plow sits at Whistler Blackcomb.
Unlike some Hollywood movies, the ending to the Whistler Blackcomb Holdings Inc. story was better than the start.
That ending came Monday when the company announced an agreement to be acquired by Vail Resorts for $36 a share, payable in cash and stock — a level that was a healthy premium to the closing price of the shares of last Friday.
But almost six years back, Whistler Blackcomb made anything but an auspicious start when it was taken public.
In October 2010, it filed a preliminary prospectus for its initial public offering. That financing was unusual to the extent that it was based on a single asset — and not on Intrawest’s entire portfolio.
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At that time , Intrawest ULC — which owned and operated other ski resorts in Canada and the U.S. — was the company’s owner with a 75 per cent stake. In 2006, Intrawest (which had been public since 1997) was acquired in a heavily leveraged transaction by Fortress Investment Group for US$2.8 billion including debt.
But in early 2010, Fortress itself came under financial pressure — so much so that there was talk that the Vancouver Winter Olympics could be under threat. (That threat passed when there was a restructuring at Fortress.)
In its October 2010 filing, Whistler Blackcomb planned to raise $300 million — with each share to be priced in the $14-$15 range. The goal was to pay a quarterly dividend of 6.50 per cent to 7 per cent.
At that time the IPO market was anything but robust — and investors were more than critical and demanding of what was being offered. For instance, a planned $850 million to $900 million offering by Transaxio Highway, a special purpose entity that offered investors a direct stake in Ontario’s Highway 407, was pulled.
But Whistler Blackcomb pressed on, even though investors continued go balk. The terms of the issue were then amended: the plan was to then sell the shares in the $12.50 to $13 range with the yield in the 7.5 per cent to 7.8 cent range.
Those new terms still did not satisfy the buyers. So the issuer was forced to accept selling price of $12 a share. Investors also demanded an annual $0.975 a share dividend — or a yield of 8.125 per cent. In all the issuer placed 25 million shares — for gross proceeds of $300 million.
Those new terms satisfied all investors, so much so that the underwriters — led by CIBC World Markets and RBC Capital Markets — were able to exercise the 3.75 million over-allotment option. In all the issuer raised $345 million in proceeds — which reduced Intrawest’s stake to 24 per cent.
Since them the company has not missed a beat: It has paid a dividend every quarter though it has chosen not to up the payment from the original $0.24375. And shareholders have enjoyed a nice capital gain — more than a double to last Friday and a triple including Monday’s takeover premium.
Overall on a total return basis, investors have now received a gain of about ten times the total return gain of the S&P/TSX composite over the same period. The shares have outperformed (by almost four times) the Royal Bank, the country’s largest company, over the same time.
According to its management information circular, the company’s largest shareholder is Denver-based KSL Capital Partners. In late 2012, the private equity firm “specializing in travel and leisure enterprises it acquired a 24 per cent stake at $12.75 a share. It bought that block from Intrawest.
Financial Post
bcritchley@postmedia.com
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发表于 2016-8-8 17:10:49
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