Olympic ski venue Whistler Blackcomb warns potential investors of risks
A new public company that will sell shares in Whistler Blackcomb says it plans to pay out significant dividends, but warns that any investment in the ski resort “involves a high degree of risk”- from another economic downturn to the fallout from an avalanche.
Whistler Blackcomb Holdings Inc. did not say how much it plans to raise from the sale or when it expects to make the offering, in documents filed with B.C. securities regulators.
However, it lists an array of risks ranging from bad weather to currency fluctuations to dependence on a seasonal workforce for any investor considering taking a stake in the company once it goes public.
The filing also provides some insight into operations – including financial information – at the self-described “largest and most visited” ski resort in North America, for the first time since its current owner Intrawest was taken private.
The financial statements don’t show much growth, but the promise of hefty dividends might be enough to convince investors that the ski resort and Olympic venue is worth the risks.
The company “intends to distribute a significant amount of its cash available for the payment of dividends on an ongoing basis,” it said in the filings.
Analysts have estimated the resort could be worth as much as $500 million alone.
The new corporation will use proceeds from the offering to repay Intrawest ULC, the current owner of the assets.
Intrawest will continue to own a stake in the company, which in turn will own 75 per cent of the business operations at the resort. Japan’s Nippon Cable Co., Ltd. will own the remaining stake in the resort’s business operations.
The new corporation’s management team will be headed by Bill Jensen, currently chief executive of Intrawest.
It is making the IPO now in part to capitalize on the international spotlight thrust on the ski resort during this year’s Olympics, the filing said.
“As a result of the significant media coverage, including over 50,000 hours of television coverage, awareness of the Resort Municipality of Whistler has increased dramatically,” management said in the filings.
Its unaudited results for the financial year ended June 30 include earnings of $45.5 million on $214 million in revenues, compared to a $51.8 million profit in 2009 on $218.7 million in revenues.
Lift operations were its biggest source of revenue in, providing Whistler Blackcomb with $104.3 million in 2009. As much as 91 per cent of that was earned during the winter season.
The operation also generated $20.6 million from ski school operations, $40.1 million from retail and rental operations, $26.6 million from food and beverage operations, $15.3 million from other resort operations and $11.8 million from real estate activities.
Intrawest bought Blackcomb Mountain in 1986 and Whistler in 1997, when they were integrated.
U.S. private-equity fund Fortress Investment Group acquired Whistler Blackcomb when it bought Intrawest in a $2.8-billion leveraged buyout near the height of the real estate bubble in 2006.
Fortress renegotiated terms of a loan agreement with creditors last April, months after Whistler Blackcomb’s owners Intrawest had been slated for the auction block during the 2010 Games.
The resort has already attracted offers from ski resort rival Vail Resorts Inc. and a number of other bidders, which have been turned down.
Intrawest has recently sold off several non-core assets including Florida’s Sandestin Golf and Beach Resort, the Squaw Valley ski resort in California and the Panorama Mountain resort in Invermere, B.C.
