UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of
1934
Date
of
Report (Date of Earliest Event Reported): September 10, 2007
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Vail
Resorts, Inc.
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(Exact
name of registrant as specified in its charter)
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Delaware
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1-9614
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51-0291762
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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390
Interlocken Crescent, Suite 1000,
Broomfield,
Colorado
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80021
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code:
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(303)
404-1800
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Not
applicable
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(Former
name or former address, if changed since last report)
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Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any
of the following provisions:
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[ ]
Written communications pursuant to Rule 425 under the Securities
Act
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Soliciting materials pursuant to Rule 14a-12 under the Exchange
Act
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Pre-commencement communications pursuant to Rule 14d-2(b) under
the
Exchange Act
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Pre-commencement communications pursuant to Rule 13e-4(c) under
the
Exchange Act
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Item
7.01. Regulation
FD Disclosure.
On
September 10, 2007, Vail Resorts, Inc. (“Vail Resorts” or the “Company”), sent a
letter to the Chairman of the Board of American Skiing Company (“ASC”) to
express Vail Resorts’ continuing interest to purchase all of the outstanding
stock of ASC’s wholly-owned subsidiary, ASC Utah, Inc. (“ASC Utah”), the owner
and operator of The Canyons ski resort (“The Canyons”) and to offer an increased
acquisition price designed to fully repay the preferred stockholders of ASC
and
to provide the common stockholders of ASC with an opportunity to participate
in
the proceeds of such a sale.
Vail
Resorts is supplementing its offer to pay $110 million in cash for ASC Utah
as
previously disclosed by agreeing to grant a 30% interest in the net cash
flow
(as defined) to Vail Resorts arising from the ownership and development of
the
real estate development rights held by ASC Utah (“ASC Utah
Rights”). Vail Resorts currently estimates that such 30% interest
could produce up to $650 million in incremental cash for ASC through 2020
(the
“Deferred Real Estate Purchase Price”).
In
addition to the Deferred Real Estate Purchase Price, Vail Resorts is willing
to
accept the purchase agreement entered into between ASC and Talisker Canyons
Finance Company LLC and Talisker Corp. (together, “Talisker”), other than for
certain modifications to reflect Vail Resorts’ new offer and the current
estimated timing of the transaction.
Vail
Resorts’ previous offer for The Canyons, as well as further information and
background on Vail Resorts’ attempt to acquire The Canyons, is described in
greater detail in its Current Report on Form 8-K, filed with the Securities
and
Exchange Commission on July 27, 2007.
The
information in this Item 7.01, including the exhibit, is furnished and shall
not
be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act
of 1934, as amended, or otherwise subject to liabilities under that section,
and
shall not be deemed to be incorporated by reference into the filings of the
Company under the Securities Act of 1933, as amended, regardless of any general
language in such filings.
Statements
in the attached letter, other than statements of historical information,
are
forward looking statements that are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from those projected. Readers are cautioned
not to place undue reliance on these forward-looking statements which speak
only
as of the date hereof. Such risks and uncertainties include but are not limited
to: the ability of Vail Resorts to complete the consummation of The Canyons;
adverse changes in the real estate market in Utah and across the United States
in general; the ability to obtain financing on terms acceptable to Vail Resorts
to finance such real estate development projects; failure to commence or
complete the planned real estate development projects; failure to achieve
the
anticipated short and long-term financial benefits from the planned real
estate
development projects; shortages or rising costs in construction materials;
our
reliance on government permits or approvals for our use of federal land or
to
make operational improvements; economic downturns; terrorist acts upon the
United States; threat of or actual war; unfavorable weather conditions; capital
expenditures and growth strategy; and adverse consequences of current or
future
legal claims. All forward-looking statements attributable to us or any persons
acting on our behalf are expressly qualified in their entirety by these
cautionary statements. Readers are also directed to other risks discussed
in
documents filed by the Company with the Securities and Exchange
Commission.
Item
9.01.
Financial Statements and Exhibits.
(d) Exhibits. The
following exhibits are filed or furnished herewith:
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Exhibit
No.
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Description
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99.1
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Letter
to American Skiing Company, dated as of September 10, 2007, regarding
increased offer to purchase all outstanding stock of ASC Utah,
Inc.
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SIGNATURE
Pursuant
to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report
to
be signed on its behalf by the undersigned hereunto duly
authorized.
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Dated:
September 10, 2007
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Vail
Resorts, Inc.
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By:
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/s/
Jeffrey W. Jones
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Jeffrey
W. Jones
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Senior
Executive Vice President and Chief Financial
Officer
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Exhibit
99.1
September
10, 2007
Mr.
Steven Gruber
Chairman
of the Board
American
Skiing Company
136
Heber
Avenue
Suite
303
Park
City, UT 84060
Dear
Mr.
Gruber:
On
July
28, 2007, I wrote to you to express the interest of Vail Resorts, Inc. (“Vail”)
in acquiring ASC Utah, Inc. (“ASCU”). I am again writing to you to
express our continuing interest in such an acquisition and to offer you an
increased acquisition price designed to fully repay the preferred stockholders
of American Skiing Company (“ASC”) and to provide the common stockholders of ASC
with an opportunity to participate in the proceeds of such a sale.
As
an
indication of our interest in an acquisition of ASCU and our desire to close
such an acquisition in an expeditious manner that would allow a timely and
efficient transition of The Canyons to Vail, we are hereby supplementing our
previous offer, as follows:
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Purchase
price for ASCU of $110 million in cash plus a 30% interest in the
net cash
flow to Vail arising from the ownership and development of the real
estate
development rights held by ASCU (“ASCU Rights”). We currently
estimate that such 30% interest could produce up to $650 million
in
incremental cash for ASC through 2020 and are providing the details
of the
calculation of such payments (the “Deferred Real Estate Purchase Price”)
under separate cover.
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·
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Full
acceptance by Vail of the purchase agreement (the “Talisker Agreement”)
entered into between ASC and Talisker Canyons Finance Company LLC
and
Talisker Corp. (together, “Talisker”), other than certain modifications to
reflect our new offer and the current estimated timing of the
transaction. This would include our willingness to provide the
same indemnity being provided by Talisker and to put up the same
deposit
with the same conditions as provided for in the Talisker
Agreement. We will be providing a new purchase agreement (the
“Vail Agreement”) under separate cover, that reflects these minor changes
and which we would be prepared to execute once you are free to do
so.
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We
believe this offer represents a very substantial improvement to ASC and its
common and preferred stockholders over the Talisker Agreement for the following
reasons:
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·
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The
Vail Agreement will provide an additional $10 million in up front
cash
payment over the Talisker Agreement cash price and the same indemnity
protections, albeit from an entity with a significantly higher market
capitalization ($2.1 billion) than the $100 million representation
made by
Talisker in the Talisker Agreement.
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·
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The
Vail Agreement will also provide significant future upside
potential. Estimates of the total future net real estate
development profits from the ASCU Rights range from $2.0 billion
to $2.5
billion through 2020, of which up to $650 million would be payable
as the
Deferred Real Estate Purchase
Price.
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The
Deferred Real Estate Purchase Price provides ASC with the potential
to
completely pay off its existing preferred stock and offer a material
recovery to its common shareholders. We understand that ASC is
currently in the process of liquidation. We would be prepared
to work with you to either adjust the ASC liquidation plan or alter
the
terms of the Deferred Real Estate Purchase Price to provide for an
efficient mechanism for all ASC stockholders to receive future pay
outs.
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The
Talisker Agreement is conditioned (as is the Vail Agreement) upon
receiving the consent of Wolf Mountain Resorts, LC (“Wolf”) pursuant to
the terms of the Ground Lease, dated July 3, 1997, by and between
Wolf and
ASCU (the “Ground Lease”). Pursuant to the terms of the Ground
Lease, Wolf is required to provide that consent if the new owner
of ASCU
has the “financial condition and operating capability and experience
reasonably adequate to operate the premises in a manner consistent
with
other comparably sized ski resorts in the United
States.” Talisker has never operated a ski resort and Wolf has
already manifested its lack of intention to consent to the Talisker
Agreement, having filed a complaint in U.S. District Court asking
the
Court to declare that it would not be unreasonable for Wolf to withhold
its consent to the Talisker Agreement and telling the Park City,
Utah
newspaper, the Park Record, that “Talisker lacks any operating capability
to adequately run The Canyons professionally, safely and in a manner
consistent with other ski resorts of The Canyons' size”. To the
contrary in the case of Vail, Mr. Griswold, the principal of Wolf,
has
indicated his willingness to provide his consent to a transfer of
ASCU, if
the new purchaser were a world class operator and, more recently,
has made
comments in the Park Record, indicating that he “chose Vail to operate The
Canyons because Talisker lacks experience running ski
resorts”. Vail is the premier mountain resort operator in the
world, with both industry leading operating experience and significant
financial where-with-all. As such, we believe a transaction
with Vail offers a very high likelihood of obtaining this required
consent.
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In
addition to our outstanding track record at operating mountain resorts,
Vail also has significant real estate development expertise, with
some of
the most prestigious mountain resort projects anywhere in North
America. In addition, maximizing the value of the Canyons real
estate will require significant investments in snowmaking, lift access
and
other mountain infrastructure, which will require the technical expertise
and track record of an experienced operator. We believe the ASC
stockholders would be very well served with Vail overseeing the future
real estate development at the Canyons and they would share in the
future
upside of our efforts through the Deferred Real Estate Purchase
Price.
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We
are
prepared to meet with you immediately to begin working together to bringing
this
transaction to conclusion for the benefit of ASC and all of its
stockholders.
Very
truly yours,
/s/
Robert Katz
Robert
Katz
Chief
Executive Officer
Vail
Resorts, Inc.