Intrawest merger challenged in federal court
June 7, 2017
By Lance Maggart | email@example.com
Colorado's ski industry was rocked in early April with the announcement Aspen Skiing Co. and KSL Capital Partners was purchasing ski industry behemoth Intrawest, former owner of Winter Park Resort, but the viability of that deal is now in question after an Intrawest stockholder filed a lawsuit challenging the action.
The lawsuit, filed on behalf of stockholder Edward Hayden, claims Intrawest "failed to conduct a sufficient and robust review of strategic alternatives," according to documents filed last week with the U.S. District Court of Denver.
The suit was filed shortly before a Monday deadline for Intrawest stockholders to submit a written demand for an appraisal of the company.
The lawsuit alleges that the Intrawest Board of Directors authorized a "materially incomplete and misleading" information statement explaining why the merger was accepted.
A valuation analysis performed by the company's financial advisers, Deutsche Bank Securities Inc. and Moelis & Co., is also being questioned in the lawsuit.
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Hayden's lawsuit also takes issue with information statement's financial projections for the company.
The lawsuit claims Intrawest stockholders did not receive adequate compensation for their shares under the terms of the sale. 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, according to the suit.
The lawsuit notes Intrawest stock was trading at $25.50 per share just before the merger was announced, but the deal inked between Intrawest and the purchasing entities sets the per share sale price at $23.75.
The lawsuit from Hayden asks a judge to issue an injunction stopping the parties from completing the merger until Intrawest provides all information related to the decision.
Hayden's lawsuit asks the court to declare the situation as a class-action lawsuit, which would allow additional stockholders to join the legal proceedings in the future.
Hayden is being represented by Monteverde & Associates PC, based in New York City.