It’s not often that a resort company make financial news as the biggest winner in the markets for the day, but that’s exactly what happened on Monday.
Peak Resorts (NYSE: SKIS) was the best performing stock among all the public exchanges in the U.S., with shares more than doubling in response to a particularly attractive takeover offer.
Vail Resorts (NYSE: MTN) finalized an agreement to acquire Peak Resorts for a hefty $11 per share in a total transaction worth $264 million. Both companies approved the agreement, which would be an all-cash deal, and are currently waiting for regulatory scrutiny and antitrust clearance.
Peak Resorts has an asset portfolio that includes 17 ski areas in the U.S., while Vail resorts owns as much as a few dozen resorts spread across several different countries.
“We are incredibly excited to have the opportunity to add such a powerful network of ski areas to our Company,” said Rob Katz, chairman and chief executive officer of Vail Resorts in a press release. “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 are 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. The acquisition fully embodies our philosophy of Epic for Everyone, making skiing and riding more accessible to guests across the U.S. and around the world.”
Peak previously had a buy-rating target of $7.67 from three separate analysts, a significant increase in comparison to the company’s 52-week range, which was between $3.75 to $5.55 per share. Vail also has a “buy” rating by analysts, albeit with a much more modest price target of $247.18 per share as an average between 11 analysts covering the stock.
Over the past 52-weeks, Vail has swung between $179.60 to $302.76, which shows that most analysts weren’t as optimistic about the larger company’s performance, with their price target falling within the 52-week range, whereas Peak’s target was well outside of its 52-week range.
Shares of Peak Resorts jumped 112 percent in response to the news, a jump which happened entirely overnight before the price of the stock was frozen. Vail Resorts’ stock price was up a milder 2.8 percent in light of the takeover offer, ending the day at $231.98 per share. While not much of an opportunity anymore, investors who had kept shares of the small ski resort company were well rewarded for their patience.
Peak Resorts Company Profile
Peak Resorts Inc is a holding company. The firm owns and operates day ski and overnight drive ski resorts through its wholly-owned subsidiaries. The company and its subsidiaries operate in a single business segment: Ski Resort Operations.
It currently operates 17 ski resorts primarily located in the Northeast and Midwest United States. Its ski resort operations consist of snow skiing, snowboarding and snow sports. The company also manages hotels in Bartlett, New Hampshire; West Dover, Vermont; and Hunter, New York. – Warrior Trading News