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Industry trends contribute to Heavenly sale rumors

Rob Bhatt

Consolidation of North American ski resorts and the sell-off of U.S. assets formerly held by Japanese companies have helped fuel rumors that Heavenly Ski Resort may be up for sale.

To date, no such deal, or even talks about a possible transaction, have been verified despite widespread speculation.

Heavenly President Dennis Harmon did not return phone calls placed to his office this week.

Leslie B. Otten, chairman and CEO of American Skiing Company, said his company has received numerous media inquiries in recent weeks about ASC’s possible interest in purchasing Heavenly. ASC, based in Bethel, Maine, is one of the largest ski resort ownership companies in the nation.

“Our company has a policy of never confirming or denying a possible sale or acquisition unless there is something to talk about,” Otten said Thursday. “There is nothing to talk about.

“There are always rumors about an acquisition with our name or someone else’s name attached to every property that is not already owned by Vail, Intrawest, ASC or Booth Creek,” Otten added.

He believes the rumors stem from industrywide consolidation.

With the number of skier visits nationwide leveling off in recent years, Otten said some industry experts believe that consolidation is the best way to hold the line on prices and improve facilities.

ASC is one of four major companies that have been active in acquiring ski resorts across the United States – including some expansion into Lake Tahoe.

Last year, ASC purchased S-K-I Limited to bring to eight the number of New England ski resorts – including Vermont’s Killington and Maine’s Sugarloaf, U.S.A. – under its full or partial ownership.

Intrawest Corp., based in Vancouver, B.C., during the past three years has fully or partially acquired four resorts, including 33 percent ownership last year of nearby Mammoth and June Mountain. Closer to home, Intrawest hopes to begin construction next year on a base village at Squaw Valley, U.S.A.

Booth Creek, Inc., based in Vail, Colo., last year acquired Northstar-at-Tahoe and Sierra-at-Tahoe in its $127 million buyout of Fibreboard Corp.’s Resort Group. In total, Booth Creek acquired 10 resorts in New Hampshire, Washington state, Wyoming and California in its 1996 buying frenzy.

And Vail Resorts, Inc., owners of Vail and Beaver Creek, in January merged with Ralcorp Holdings, Inc., to acquire majority ownership of Breckenridge and Keystone Mountain outside Denver.

The move toward consolidation comes at a time when Japanese businesses have been divesting from the United States. Japanese interests invested about $77.8 billion in U.S. real estate between 1985 and 1993, according to the E&Y Kenneth Leventhal Real Estate Group, a Los Angeles-based consulting firm. The purchases included office buildings, golf courses, amusement parks and ski resorts – many at inflated prices during the height of the 1980s real estate boom.

An ongoing banking crisis in Japan is cited among factors for divestment dating back to 1993. Since then, Japanese firms have sold more than $4 billion in U.S. assets each year, with $8.9 billion sold in 1995 alone, according to E&Y.

Intrawest in 1994 bought Stratton Mountain in Vermont and, in 1995, Snowshoe in West Virginia from Japanese-based owners. One of the first Japanese divestments from American ski resorts came in 1993, when Japanese-based Victoria Co. Ltd., sold Breckenridge to Ralcorp Holdings, Inc., a spin off company of Ralston Purina.

Kamori Kanko, Ltd., based in Sapporo City, Japan, bought Steamboat ski area in Colorado in 1989 and purchased Heavenly a year later for an undisclosed sum.

Dale Strickland, a senior manager for E&Y, said he has heard rumors about Kamori Kanko’s possible sale of Steamboat and Heavenly since 1994. However, he added, his company has never been able to verify any truth to these rumors.

Given trends in the industry, it would hardly seem shocking if Heavenly is sold to any of the four major resort ownership groups already in expansion mode or others seeking to ride the consolidation wave. In fact, based on these trends, it may be more surprising if the resort does not sell in the near future.


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