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Vail Resorts for sale?

Alex Miller

VAIL, Colo – With the announcement Monday of Adam Aron’s departure, talk of an imminent sale of Vail Resorts heated up.

The name of one potential buyer making the rounds was Mike Shannon, a former Vail Associates executive who recently sold his interest in KSL Resorts for a reported $1.6 billion.

Vail Resorts’ market capitalization – or total stock value – is about $1.2 billion.

“We don’t comment on things like that,” Aron said Monday. “We never have.”

Will Marks, an investment analyst with JMP Securities who follows Vail Resorts, said he had not heard any rumors. In a note to investors Monday, Marks wrote: “While we do not necessarily view Vail as a takeover candidate, the departure of Mr. Aron, combined with what we believe is a stock trading at well below (total value of company), and a large private equity appetite for inexpensive real estate-related entities, make us believe that there could be interest in Vail shares from larger buyers.”

JMP reiterated a “strong buy” rating on Vail Resorts stock.

In the past, some analysts have said the company is worth more broken up into pieces and sold than all together, making Vail Resorts an attractive takeover target.

In the summer of 2004, the Vail Resorts board was rumored to have received competing offers from Texas Pacific Group and Henry Kravis, a principal in New York investment firm Kohlberg Kravis Roberts.

The company never responded to those rumors, no deal materialized, and the company’s stock, which rose 35 percent during the rumor phase, dropped under $18 per share in early August.

On Monday, Vail Resorts stock dropped almost 4 percent, to $31.22, with a sales volume of 681,400 – about 163 percent above average. The stock has dropped 19 percent since its peak trading price Dec. 2, 2005 of $38.45.


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