Intrawest Controversy may slow Aspen’s parent company KSL purchase.
Less than two months after its April buying spree rattled the skiing and snowboarding world, Aspen Skiing Company’s acquisition of Intrawest Resorts has hit a snag, as a stockholder of Intrawest has filed a lawsuit challenging the legality of the merger, according to the Aspen Times.
Per the Aspen Times, Intrawest stockholder Edward Hayden filed a lawsuit Friday in the U.S. District Court of Denver.
The lawsuit claims that Intrawest’s top executives and board of directors “failed to conduct a sufficient and robust review of strategic alternatives” prior to its $1.5 billion sale to Aspen Skiing Co.
In addition to neglecting to perform due diligence on strategic alternatives to accepting the Aspen merger, Hayden claims that top executives at Intrawest provided misleading information to their stockholders to explain why the merger was accepted.
“In particular, the information statement contains materially incomplete information concerning (i) financial projections for the company; and (ii) the valuation analysis performed by the company’s financial advisers, Deutsche Bank Securities Inc. and Moelis & Co., in support of their fairness opinions,” Hayden’s lawsuit reads, according to the Aspen Times.
Hayden’s biggest gripe with the merger seems to be the valuation of Intrawest’s stock by Aspen Skiing Co. prior to the acquisition. According to the Aspen Times, the lawsuit reported that prior to the merger, Intrawest’s stock was trading at $25.50 per share yet the deal was for $23.75 per share.
Aspen (above) went on a huge buying spree in April, snatching up resorts across the United States and Canada. Photo: Courtesy of Daniel Bayer/Aspen Snowmass
“That means instead of stockholders receiving a premium for their shares, as is customary in merger situations, Intrawest stockholders would actually be offering their shares at a discount,” the lawsuit read.
Per the Aspen Times, Aspen Skiing Co. isn’t named in the lawsuit, but rather, Hayden is asking a judge to prohibit the merger from finalizing. Hayden is also requesting that the judge declare his suit a class-action lawsuit, so that other stockholders may join him at a later time in contesting the merger.
Source : Aspen Times