Are Peak Resorts Shareholders Getting Enough in the Buyout?

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Peak Resorts Inc. (NASDAQ: SKIS) shares more than doubled early on Monday after the firm announced that Vail Resorts Inc. (NYSE: MTN) would acquire it. This is an all-cash transaction that is expected to close in the fall of 2019, pending customary and regulatory closing conditions, including a shareholder vote by Peak Resorts.

Under the terms of the deal, Vail is purchasing Peak Resorts for $11 per share, a premium of roughly 116% from its most recent closing price of $5.10. At the same time, this price offers a premium of 155% from the 50-day moving average of $4.31.

Keep in mind that Peak shares hit a multiyear low just a month ago, one not seen since the summer of 2016.

The boards of directors of both companies have approved the transaction.

Rob Katz, board chair and chief executive of Vail Resorts, commented:

We are incredibly excited to have the opportunity to add such a powerful network of ski areas to our company. Peak Resorts’ ski areas in the Northeast are a perfect complement to our existing resorts and together will provide a very compelling offering to our guests in New York and Boston. With this acquisition, we’re also able to make a much stronger connection to guests in critical cities in the Mid-Atlantic and Midwest, and build on the success we have already seen with our strategy in Chicago, Minneapolis and Detroit. Tim and his team have assembled a fantastic array of resorts and created a strong and loyal guest network. We look forward to welcoming Peak Resorts’ guests and team members to the Vail Resorts family.

Shares of Peak Resorts closed Friday at $5.10, in a 52-week range of $3.75 to $5.45. The consensus analyst price target is $8.00. Following the announcement, the stock was up about 113% at $10.86 in early trading indications Monday.

Vail closed on Friday at $225.71 a share. The 52-week range is $179.60 to $302.76.


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