What Price "Stowe Mountain Resort"?

JD · May 14, 2009

CO-OP....Who's in?

eastcoastpowderhound · May 15, 2009

GrilledSteezeSandwich said:
So if Stowe mountain resort has $100 million in debt, and it sells for $100 million..with the new buyer taking on the debt..than it essentially sold for $200 million give or take future interest minus and plus depreciation of assets???? Any MBAs have some insight..

just gave you some, here's a little more: typically it would be reported as "The GSS Realty Partners LLC have entered into an agreement to purchase the stowe, VT resort from troubled AIG for a cash purchase of 75 million, an ounce of weed, a signed picture of GSS himself, and assumption of liabilities" The assumption of liabilities part is standard and is typically not factored into the "sale" price that is bantered about. These could be anything from exisitng development contracts, land and equipment leases, pension payments, etc. Short term debt like a revolving line of credit would typically be paid off by AIG from the proceeds but a long term liability like a land lease or contractual obligations for future development of the golf course or home sites, etc will be assumed by the new owners...its not cash they have to fork over at the closing, but obligations that they are accepting as a course of the ongoing business operations.

GrilledSteezeSandwich · May 15, 2009

JD said:
CO-OP....Who's in?

I've got $5 on it..and I think Snowboarders should be allowed..

RootDKJ · May 15, 2009

JD said:
CO-OP....Who's in?

In all seriousness, I'd be in for a couple grand to be one of the founding members.

I think it's going to take more than that however.

GrilledSteezeSandwich · May 15, 2009

RootDKJ said:
In all seriousness, I'd be in for a couple grand to be one of the founding members.

I think it's going to take more than that however.

a couple grand will buy me several years worth of lift tickets to Stowe..since I ski there several days a season..

billski · May 15, 2009

It seems, according to the poll that the AZ Mergers and Acquisitions Team is all over the map. No consensus forthcoming. This is going to be a gamers deal!

drjeff · May 16, 2009

RootDKJ said:
In all seriousness, I'd be in for a couple grand to be one of the founding members.

I think it's going to take more than that however.

A couple of grand per member could do it, you'd just need a TON of members

GrilledSteezeSandwich · May 16, 2009

drjeff said:
A couple of grand per member could do it, you'd just need a TON of members

Do you think Stowe could become a prive resort like the Yellowstone Club?

ski_resort_observer · May 17, 2009

GrilledSteezeSandwich said:
Do you think Stowe could become a prive resort like the Yellowstone Club?

Hope not...the YC filed for bankruptcy.

deadheadskier · May 17, 2009

GrilledSteezeSandwich said:
Do you think Stowe could become a prive resort like the Yellowstone Club?

Would NEVER happen

BushMogulMaster · May 18, 2009

From SAM's article today:

According to the Stowe Reporter, the town government’s 2008 grand list values all the property in the hands of AIG Stowe Holdings at just under $100 million. That includes the 1,795-acre ski complex, valued at $23.3 million,

As I suspected, the ski area is only making enough (ebidta) to translate to a $23.3MM value (or perhaps the "town government" uses a different method of valuation). Now, as it states above, all of AIG's Stowe holdings there are worth close to $100MM, but who knows what all that includes! Rest of the article:

SAM Magazine—Stowe, Vt., May 18, 2009—Stowe Mountain Resort, owned by insurance giant and ward of the government AIG, is for sale, AIG spokesman Peter Tulupman confirmed last week. AIG has received “a surprising number” of unsolicited bids from qualified buyers, Tulupman said, though no bidders have been named or identified, nor has the asking price been revealed.

How much is Stowe worth? One industry insider has estimated it to be at least equal to Killington, which sold in 2007 for $85 million. While Stowe hosts fewer visits overall, the area has valuable permits for future real estate development, including remaining portions of the nearly-completed $400 million expansion project at Spruce Peak.

According to the Stowe Reporter, the town government’s 2008 grand list values all the property in the hands of AIG Stowe Holdings at just under $100 million. That includes the 1,795-acre ski complex, valued at $23.3 million, and Stowe Country Club, valued at $4.3 million.

Stowe Mountain operations include the Spruce Camp base lodge, rental equipment and demonstration centers, ski and snowboard school, children’s ski and snowboard programs, grooming and snowmaking, 10 restaurants and grills on and around the mountain, cross-country skiing activities, summer recreation activities including the Stowe Country Club golf course, auto toll road, and gondola sky ride, and a variety of resort properties, including Stowe Mountain Lodge (and its remaining inventory of fractional and wholly owned condominiums), the spa at Stowe Mountain Lodge, remaining home sites, and the Stowe Mountain Club, the new golf course cut into the side of a mountain.

Tulupman said AIG is “confident we will attract a number of qualified buyers.” He called the sale “a once-in-a-lifetime opportunity” and noted that AIG recently sold a building in Tokyo that also fit the once-in-a-lifetime description, and got a really good price.

News of the possible sale of Stowe resort has been widely anticipated. AIG has been selling assets all over the world, trying to recover from a near-collapse that was avoided only by a federal bailout. AIG has received more than $182 billion from the U.S. Treasury and Federal Reserve, and the Treasury now owns nearly 80 percent of the company.

AIG’s relationship with Stowe began with AIG’s founder, Cornelius Vander Starr, who launched the Mt. Mansfield Co., which owned the resort for many years. In 1970, his estate sold the company to AIG.

Maurice “Hank” Greenberg, who chaired AIG from 1968 to 2005, shared Starr’s love for the resort. In an interview with Forbes magazine last November, Greenberg said he doubts the current management feels the same. “It’s a different company with different people now,” he told Forbes. “I think the government would rather see it sold.” It now looks like the government will get its wish.

Highway Star · May 18, 2009

BushMogulMaster said:
As I suspected, the ski area is only making enough (ebidta) to translate to a $23.3MM value (or perhaps the "town government" uses a different method of valuation). Now, as it states above, all of AIG's Stowe holdings there are worth close to $100MM, but who knows what all that includes! Rest of the article:

That's the town's valuation is for the assessed taxable value (for property tax). Don't think that has much do with the operating profit or the actual value as a business.

GrilledSteezeSandwich · May 18, 2009

BushMogulMaster · May 18, 2009

Highway Star said:
That's the town's valuation is for the assessed taxable value (for property tax). Don't think that has much do with the operating profit or the actual value as a business.

Fair point, but I'm certain including private land, there is not $23MM in assets there (well, perhaps, depending upon what they include. I wonder if the list mentioned in the article is actually what they consider "ski area?" If so, I suppose there is a solid set of valuable assets).

What Price "Stowe Mountain Resort"?

What price will Stowe Mountain Resort actually sell for?

Less than $25M

$25-50M

$51-75M

$76-100M

$101M-125M

$125-150M

$151-175M

$176-200M

$201-225M

Over $225M

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